India has signed its first-ever structured deal to import liquefied petroleum gas (LPG) from the United States, marking a major step in diversifying the country’s energy supply. The one-year agreement will see state-owned oil companies bring in 2.2 million tonnes of LPG from the U.S. Gulf Coast during the 2026 contract year, which accounts for nearly 10% of India’s total annual LPG imports.
Union Petroleum Minister Hardeep Singh Puri described the deal as “historic,” emphasizing that it ensures a secure and affordable supply of LPG for Indian households. The agreement was negotiated after Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) delegations met with US producers to finalize terms.
The contract will use the Mont Belvieu price benchmark, a standard reference point in the global LPG market, helping India manage costs effectively. Analysts say this move also reduces India’s dependence on traditional suppliers from the Middle East, enhancing energy security.
India’s domestic LPG demand is growing rapidly, partly due to the Pradhan Mantri Ujjwala Yojana, which provides subsidized gas connections to low-income families. Even with global LPG prices surging by more than 60% last year, Ujjwala beneficiaries continued to pay much lower rates per cylinder, while the government absorbed the difference to shield households from price shocks.
This deal could also strengthen long-term energy cooperation between India and the U.S., and pave the way for more structured agreements in the future. By securing a significant portion of its LPG needs from a reliable source, India aims to stabilize supply and prices amid global market fluctuations, ensuring continued access to clean cooking fuel for millions of families.