India on Monday announced that it has entered into a one-year agreement for the import of around 2.2 million tonnes of liquefied petroleum gas from the United States Gulf Coast.
The deal, which was announced by the Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on social media, involves state-owned refiners including Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.
Puri described it as a “historic first” for India. Under the agreement, the country will import 2.2 million tonnes of liquefied petroleum gas from the US Gulf Coast over the next year.
“One of the largest and the world’s fastest growing LPG markets opens up to the United States,” Puri said. “In our endeavour to provide secure affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing.”
This agreement marks the first structured contract by Indian companies to purchase American LPG, the minister added.
India’s annual LPG consumption was approximately 31 million tonnes in the fiscal year 2024-’25, with imports meeting around 60% of this demand.
Historically, over 90% of these imports have come from long-term agreements with West Asian producers, which are geographically closer to India. However, under this new deal, the LPG will be benchmarked to the price at Mount Belvieu, a major hub for natural gas products located near Houston, Texas.
The deal comes amidst ongoing discussions between India and the US on broader trade relations.
Tensions between the two countries had escalated after the Donald Trump administration on August 6 doubled the tariffs on goods imported from India to 50% for purchasing Russian oil amid the war in Ukraine.
Trump has repeatedly alleged that India’s imports were fuelling Russia’s war on Ukraine.
After the “reciprocal” levies were announced, New Delhi had said it was “extremely unfortunate” that the US had chosen to impose additional tariffs on India “for actions that several other countries are also taking in their own national interest”.
At the East Asia Summit in October, Indian External Affairs Minister S Jaishankar stated that energy trade was becoming “increasingly constricted” and that “principles are applied selectively”.
On November 10, Trump said that Washington will bring down the tariffs imposed on India “at some point” and claimed that New Delhi has substantially reduced its purchase of Russian oil.
Trump also said that his country was getting close to a “fair deal” with India.
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