India Signs Historic LPG Deal with US to Boost Energy Security

In a historic move set to reshape India’s energy landscape, the country has signed its first structured, long-term agreement to import liquefied petroleum gas (LPG) from the United States. The deal, covering one year from 2026, will bring around 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast, representing nearly 10% of India’s total annual imports.

Union Petroleum and Natural Gas Minister Hardeep Singh Puri described the agreement as “a significant step” in India’s efforts to secure affordable and stable LPG supplies for households nationwide. The contract is benchmarked to Mont Belvieu, the key pricing hub for LPG in the US, ensuring transparency and alignment with international market standards.

Diversifying Supply for Energy Security

India, the world’s second-largest LPG consumer, currently relies heavily on West Asian countries for more than half of its LPG imports. Rapid household adoption of LPG, driven in part by the government’s Ujjwala Yojana, has intensified demand, highlighting the need for diversified sourcing. By turning to the US market, India aims to reduce supply-chain risks, ensure stable pricing, and shield consumers from global price volatility.

Last year, despite LPG prices rising over 60% worldwide, the government maintained Ujjwala beneficiaries’ cylinder prices at Rs 500–550, absorbing more than Rs 40,000 crore in subsidies. The US deal is expected to further support this effort, providing reliable supplies for households while expanding India’s energy cooperation with international partners.

A Step Toward Sustainable Energy Partnerships

Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) jointly negotiated the contract with US producers after months of discussions. Officials note that this milestone could pave the way for longer-term supply contracts and strengthen India-US energy collaboration in the coming years.

As India’s LPG market continues to grow, especially in rural areas, diversification remains a strategic priority. By securing structured imports from the US, India is not only bolstering energy security but also reducing reliance on a single geography, ensuring more predictable pricing for millions of households across the country.