India has signed its first structured, long-term contract to import liquefied petroleum gas (LPG) from the United States, a move the government says will strengthen the country’s energy security and diversify supply sources at a time of rising global volatility.
Union Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Monday that state-run oil companies have finalised a one-year deal to import around 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast for the contract year 2026. This volume represents nearly 10% of India’s annual LPG imports, marking a major shift in the country’s sourcing strategy.
The contract is India’s first-ever structured LPG purchase agreement with the US, and is benchmarked to Mont Belvieu, the key US pricing hub for LPG. A joint team of officials from Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) had travelled to the US over the past few months to negotiate with major American producers.
“,” Puri said, noting that one of the world’s fastest-growing LPG markets is now formally opening up to US supplies. “In our endeavour to provide secure and affordable LPG to the people of India, we have been diversifying our sourcing. This deal marks a significant step in that direction.”
India is the world’s second-largest LPG consumer, with demand driven by rapid household adoption and the continued expansion of the Ujjwala Yojana, which provides subsidised LPG connections to low-income households. Currently, India imports over 50% of its LPG needs, with most of the supply coming from West Asian markets.
The move to source a sizeable portion from the US is part of New Delhi’s strategy to reduce dependence on traditional suppliers, improve supply stability and hedge against sharp price spikes in the global market.
Puri highlighted that despite global LPG prices surging more than 60% last year, the government ensured that Ujjwala beneficiaries continued to pay only Rs 500–550 per cylinder, while actual costs touched Rs 1,100. The government, he said, absorbed the remaining burden, spending over Rs 40,000 crore to shield consumers from the price shock.
The minister called the US deal another step toward ensuring “secure, affordable, and reliable LPG supplies” for Indian households.
The agreement is expected to deepen India-US energy cooperation and could pave the way for longer-term supply contracts in the future. For Indian oil marketing companies, diversifying sourcing away from a single geography reduces supply-chain risk and adds greater pricing stability.
With India’s LPG market continuing to expand, particularly in rural regions, the government says further diversification of supply sources will remain a key priority.