India Inks Historic US LPG Deal to Import 2.2 MTPA in 2026

India has finalised an agreement with the United States to import liquefied petroleum gas (LPG), in a move aimed at strengthening the country’s energy security and expanding its supplier base.

Union Petroleum Minister Hardeep Singh Puri announced that state-run oil marketing companies have signed a one-year contract to import 2.2 million tonnes per annum (MTPA) of LPG from the US in 2026. The quantity represents nearly 10 per cent of India’s annual LPG requirement.

Calling it India’s first structured contract for US-origin LPG, Puri said the supplies will be sourced from the US Gulf Coast. He added that the agreement aligns with India’s strategy to ensure stable and affordable fuel access by diversifying sources. Senior officials from Indian Oil, BPCL and HPCL held several rounds of discussions with major American producers before finalising the deal.

In a post on social media, the minister said, “One of the largest and the world’s fastest-growing LPG markets opens up to the United States. In our endeavour to provide secure, affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing.”

Puri noted that pricing under the contract is benchmarked to Mont Belvieu, a key global LPG reference point. He also highlighted that public sector oil companies have shielded consumers from global price spikes. Despite a more than 60 per cent rise in international LPG prices last year, Ujjwala beneficiaries continued receiving cylinders at INR 500–550, even though actual costs crossed INR 1,100, prompting the government to absorb over INR 40,000 crore.

The announcement comes as India and the US explore a broader trade agreement expected by late 2025. Washington may consider rolling back tariffs imposed on Indian goods, including penalties linked to India’s purchase of Russian crude oil.

As per indsutry experts, the new LPG pact marks a significant deepening of Indo-US energy cooperation as India seeks long-term supply certainty amid geopolitical challenges.