India signs first-ever structured U.S. LPG supply deal worth 2.2M tonnes a year

India has agreed to import almost 10% of Liquefied Petroleum Gas (LPG) from the U.S. in a historic first for organized U.S. energy sales to New Delhi. Indian Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said on the X platform that the India-U.S. agreement aims to diversify India’s energy supplies.

He added that India seeks to address its trade surplus with the U.S. in the context of altering bilateral relations.

According to Singh Puri, the acquisition of LPG would use Mount Belvieu as the standard for LPG. Singh Puri revealed that over the previous few months, representatives from IndianOil, BPCL, and HPCL had traveled to the United States to discuss the deal with major producers.

India secures Historic U.S. LPG supply deal

A historic first!

One of the largest and the world’s fastest growing LPG market 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.

In a significant development,…

— Hardeep Singh Puri (@HardeepSPuri) November 17, 2025

Singh Puri stated that the discussions about the agreement ended today. He confirmed that Indian state-owned oil corporations have inked a one-year contract with the U.S. Gulf Coast to import around 2.2 million tonnes of LPG annually. Notably, he described the U.S  Gulf Coast deal as “a historic first.”

According to Puri, the purchase of LPG  would be the first structured contract of U.S. LPG for the Indian market.

Puri mentioned on the X platform that Prime Minister Narendra Modi, the head of the public sector oil companies in India, has made LPG available to consumers at a lower price. He revealed that Modi made sure that beneficiaries of the Ujjwala system continued to pay only ₹500–550 (US$6) per cylinder, despite the fact that global prices increased by more than 60% last year. 

Puri further stated that the true cost of LPG was more than ₹1,100 (US$12.41). According to Puri, last year, the Indian government paid nearly ₹40,000 crore or approximately US$4.9 billion to protect consumers from soaring LPG costs abroad.

“We believe that this move is for diversifying our LPG sourcing, which is currently concentrated in the Middle East, and also to reduce trade surplus with the U.S.” 

-Bineet Banka, Research Analyst at Nomura Financial Advisory & Securities.

According to Banka, India imports between 20 and 21 million tons of LPG yearly. Banka argued that if 10% of that supply comes from the U.S. at present prices, that means an additional $1 billion in imports from the U.S. However, Banka further claimed that the extra imports are “not much” in comparison to India’s $40 billion trade surplus with the U.S.

U.S.-India trade tensions escalate under Trump’s tariff actions

Relations between the U.S. and India have been tense since Washington levied a 50% tariff on Indian exports in August. According to a White House report, the U.S imposed a reciprocal duty of 25% on indian goods as part of a larger plan to improve domestic industries and correct trade imbalances. The remaining 25% was attributable to India’s imports of Russian oil.

President Trump stepped up his criticism of India in September, referring to trade ties with the country as “a totally one-sided disaster!”

Trump reiterated on his social media platform, Truth Social, that India was purchasing weapons and oil from Russia. According to data provided by tanker tracker Kpler, as of November 17, India’s imports of Russian crude oil remain at 1.85 million barrels per day, up from 1.6 million barrels in October.

However, Trump further accused New Delhi of selling the U.S. “massive amounts of goods” while placing high tariffs on American exports to India.

“The reason is that India has charged us, until now, such high Tariffs, the most of any country, that our businesses are unable to sell into India. It has been a totally one sided disaster!”

–Donald Trump, U.S. President.

In 2024, the World Trade Organization (WTO) Trade-weighted data reveal that India imposed a mean tax of 6.2% on U.S. imports. The data also reveal that the U.S. imposed a duty of 2.4% on Indian goods.  

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