India to Import LPG from the USA for the First Time in 2026
Historic LPG Deal Signed
On 17 November, amid a tariff dispute, India and the USA signed their first LPG deal. Under this agreement, India will import approximately 2.2 million tons (MTPA) of LPG from the USA, covering 10% of India's annual LPG demand. The deal is valid for one year, i.e., 2026, and involves Indian state-owned companies IOC, BPCL, and HPCL with US energy suppliers Chevron, Phillips 66, and Total Energies Trading.
Impact on India's Energy Security
- Reduces dependence on traditional supply sources, making the supply chain more stable.
- Minimizes the impact of global LPG price fluctuations.
- Helps balance trade with the USA.
Effect on LPG Cylinder Prices
Petroleum Minister Hardeep Singh Puri described the deal as historic. While it does not directly promise lower cylinder prices, a diversified and stable supply can indirectly benefit consumers. The long-term deal protects India from global price volatility and ensures stable supply of 2.2 million tons of LPG, covering 10% of India's demand in 2026.
Background on US Tariffs
The USA has imposed a total 50% tariff on India due to oil imports from Russia, including a 25% reciprocal tariff and 25% penalty for Russian oil. With a trade surplus with the US, India is increasing energy imports to finalize trade agreements.