India’s three major state-run oil companies have just signed a significant long-term deal to import liquefied petroleum gas (LPG) from the United States. This is a big step in India’s goal to diversify its energy sources.
The Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) will bring in 2.2 million tonnes of LPG by 2026. This will make up about 10% of India’s yearly LPG imports. Under this new agreement, Phillips 66 will supply two shipments each month, while Chevron and TotalEnergies will provide one shipment each.
This agreement comes after discussions in July 2025 between Indian officials and US producers along the Gulf Coast. It marks the first long-term LPG deal between the two nations and helps strengthen energy ties, especially as India tries to maintain relationships with both the US and Russia.
Historically, the Middle East has been the primary source for India’s LPG, with countries like Saudi Arabia and Qatar leading the way. Until now, the US supplied less than 0.6% of India’s LPG needs. This new deal aims to change that, as it is part of India’s broader strategy to enhance energy security amid rising global demand.
India is the second-largest consumer of LPG in the world, just behind China. The fuel is commonly used in households for cooking. The Indian government has promoted LPG use through programs like the Pradhan Mantri Ujjwala Yojana, which helps low-income families access cooking fuel.
Even with fluctuating global energy prices, India has continued to subsidize domestic LPG. In August 2025, the government approved Rs300 billion (about $3.4 billion) to support the three state-run companies.
This agreement comes at a time when India and the US are also discussing trade, particularly over tariff reductions affecting Indian exports. Since the US withdrew India’s preferential trade status in 2019, several Indian products have faced higher import duties.
Analysts believe that this energy deal could strengthen economic relations and may even lead to collaboration on clean fuel technologies in the future. According to the Petroleum Planning & Analysis Cell (PPAC), India imported around 20 million tonnes of LPG during the 2023-24 fiscal year, showing a steady annual demand growth of 3 to 4% as more households adopt this cleaner fuel.
The first shipments under this new agreement are expected to leave US terminals in early 2026. As energy needs evolve, strategic partnerships like this one could pave the way for India to achieve greater energy independence and security.
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