India plans to source close to 10% of its cooking gas Liquefied Petroleum Gas (LPG) imports from the U.S. starting in 2026, marking a significant shift in its energy procurement strategy. This move is aimed at diversifying suppliers beyond its current reliance on the Middle East and boosting energy-related trade with Washington.
Key Highlights
- India is the third-largest global oil importer, with over 90% of its 2024 LPG imports (~20.5 million metric tons) from the Middle East.
- LPG, a mix of propane and butane, is used primarily as subsidized cooking fuel for households.
- State-owned Indian Oil, Bharat Petroleum, and Hindustan Petroleum are the main importers.
- China’s recent 10% tariff on U.S. propane opened new arbitrage opportunities, prompting India to begin trial purchases from the U.S. in May.
- India intends to remove import taxes on American propane and butane, improving cost-effectiveness.
- Energy trade between the U.S. and India is set to increase from $10 billion to $25 billion, supporting a broader goal of $500 billion in bilateral trade by 2030.
- India’s imports of U.S. crude oil have more than doubled in 2025.
- Future U.S. LPG imports depend on freight terms and pricing, with India preferring delivered contracts to mitigate transport risks.
- LPG demand in India is growing 6% annually, and could reach 23 million metric tons by 2026.
- The International Energy Agency forecasts India’s LPG demand to hit 37.7 million metric tons by 2030, driven by household consumption.
LPG Cylinders, Courtesy: Pexels
Last updated: December 26th, 2025
