India Projects 10% of LPG Imports from US Commencing 2026: Report

India plans to import around 10% of its cooking gas (LPG) from the United States starting in 2026. The decision is part of a plan to expand energy imports and reduce the trade imbalance with the US, according to the news reports.

In 2024, over 90% of India’s 20.5 million metric tonnes of LPG imports came from the Middle East. The country’s LPG demand is mostly met through long-term contracts and free-on-board purchases from the region.

Retail and Distribution Setup

LPG in India is primarily imported by 3 state-owned firms, Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp. The gas is distributed at subsidised prices for domestic cooking use.

India rarely bought LPG from the US in the past due to high freight charges. That changed in May 2025, when Indian refiners started purchasing US cargoes following China's 10% tariff on American propane, which shifted trade flows.

As per Reuters, India is considering scrapping import taxes on US propane and butane used in LPG production. This could make US cargoes more cost-effective for Indian refiners.

Trade and Purchase 

India has committed to increasing energy purchases from the US by $10 billion, aiming for a total of $25 billion in the near term. The 2 countries have also set a target of $500 billion in bilateral trade by 2030.

LPG demand in India is growing at 5-6% annually. By 2026, total imports are projected to reach 22 to 23 million tonnes. The International Energy Agency estimates demand will hit 37.7 million tonnes by 2030.

Indian refiners are looking to buy US LPG on a delivered basis, similar to existing crude oil deals, to reduce freight-related risks. Final import volumes will depend on pricing and shipping terms.

Read more: Retail F&O Losses Rose to Over ₹1 Lakh Crore: Trader Participation Dropped 20%!

Conclusion

The planned shift to US-sourced LPG marks a logistical and trade adjustment in India’s energy-sourcing strategy, with volumes and contracts still dependent on price and delivery terms.

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