India’s three state-run oil companies have signed their first long-term contract to import liquefied petroleum gas (LPG) from the United States, marking a milestone in the country’s efforts to diversify its energy supply.
Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) will collectively import 2.2 million tonnes of LPG in 2026 under the new agreement, accounting for nearly 10 per cent of India’s expected annual LPG imports, according to sources cited by Bloomberg.
Phillips 66 will supply two cargoes per month, while Chevron and TotalEnergies will each supply one.
The agreement follows a July 2025 visit to the US by officials from the three refiners for discussions with major producers along the Gulf Coast.
It represents the first structured, long-term LPG supply deal between the two countries, strengthening energy cooperation at a time when India seeks to balance relations between its US and Russian partners.
Until now, the US had supplied less than 0.6 per cent of India’s total LPG imports.
India’s primary LPG suppliers have traditionally been the Middle East — mainly Saudi Arabia, Qatar, and the United Arab Emirates.
The shift to include the US is part of New Delhi’s broader energy diversification strategy aimed at improving security of supply amid rising global demand.
India is the world’s second-largest consumer of LPG after China, using it widely in households as a cleaner cooking fuel.
The government has promoted LPG adoption through the Pradhan Mantri Ujjwala Yojana scheme, which provides subsidised or free connections to low-income households.
Despite volatile global energy prices, New Delhi has continued subsidising domestic LPG, recently approving Rs300 billion (US$3.4 billion) in August 2025 to cover under-recoveries for the three state-run firms.
The deal arrives as India and the United States deepen trade negotiations over tariff reductions on Indian exports.
Several Indian goods have faced higher US import duties since 2019, when Washington withdrew India’s preferential trade status under the Generalized System of Preferences (GSP).
Analysts believe the new energy deal could further cement economic ties and open the door to broader cooperation on clean fuel technologies.
According to data from the Petroleum Planning & Analysis Cell (PPAC), India imported nearly 20 million tonnes of LPG in the 2023–24 fiscal year.
The country’s LPG demand has grown steadily at 3 to 4 per cent annually, driven by rising household use and government expansion of cooking fuel access.
The first shipments under the new deal are scheduled to depart from US terminals in early 2026.
