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India has announced a major agreement with the United States to import nearly 10% of its liquefied petroleum gas (LPG) from U.S. sources, marking a move toward energy diversification. The deal, signed on Monday, is set for one year and involves importing 2.2 million tons of LPG annually from the U.S. Gulf Coast, accounting for a significant portion of India’s LPG needs. This is the first structured U.S. LPG contract tailored for the Indian market.
Relations between Washington and New Delhi experienced a downturn in August, after President Donald Trump increased tariffs on Indian goods to 50%, amid accusations from U.S. officials that India is contributing to Russia’s conflict in Ukraine by purchasing discounted Russian oil. Trump also claimed that Prime Minister Narendra Modi had agreed to reduce Russian oil imports as part of broader trade negotiations, although India has not officially confirmed this.
Despite ongoing discussions, disagreements persist on various issues, including agricultural trade and Russian energy imports. India’s Petroleum and Natural Gas Minister, Hardeep Singh Puri, highlighted that the new deal will help diversify India’s LPG sources, positioning the U.S. as one of the country’s major suppliers. Puri emphasized that this agreement represents a pioneering step for U.S. LPG exports to India, underlying India’s broader effort to secure reliable and affordable energy supplies.
In response to sanctions imposed by Washington, Indian entities like HPCL-Mittal Energy have ceased Russian crude purchases, and Reliance Industries is evaluating the impact of U.S. and EU restrictions. Despite these geopolitical tensions, India’s economy — the world’s fifth-largest — grew at its fastest rate in five quarters in the quarter ending June 30, driven by increased government spending and stronger consumer confidence. However, analysts warn that U.S. tariffs could reduce India’s GDP growth by 0.6 to 0.8 percentage points if measures are not relaxed soon.
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