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India is planning to source up to 25 per cent of its liquefied petroleum gas (LPG) imports from the United States by 2027, marking a major shift in its energy procurement strategy as New Delhi seeks to reduce dependence on the Middle East and bolster trade ties with Washington.
According to Reuters, state-run fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) are expected to issue tenders within the next one to two months for U.S. LPG supplies scheduled for 2027. A delegation from the three companies is also likely to visit the United States next month to discuss long-term sourcing arrangements.
The move follows severe supply disruptions earlier this year after the Iran conflict and the closure of the Strait of Hormuz, which triggered India’s worst LPG shortage in recent years. The government was forced to divert petrochemical feedstocks from industrial users to households to ensure uninterrupted cooking gas supplies.
India currently imports nearly 66 per cent of its LPG requirements, with around 90% of those imports coming from the Middle East. In 2025, the country imported about 21.85 million metric tonnes of LPG, highlighting its heavy reliance on the region.
The diversification strategy also aligns with ongoing India-US trade negotiations. Higher purchases of American energy could help reduce India’s trade surplus with the U.S., a key demand from President Donald Trump, as both countries work toward finalizing a bilateral trade agreement over the next few months.
India has already committed to increasing energy purchases from the U.S. by $10 billion to $25 billion in the near term, while both nations have set a target of $500 billion in bilateral trade by 2030.
Imports of U.S. LPG have already accelerated. Shipments crossed 1 million tonnes in June for the first time and are expected to exceed India’s initial 2026 annual contract target of 2.2 million tonnes, according to sources.
Supply disruptions from the Middle East have weighed on domestic consumption. India’s LPG consumption fell about 8% year-on-year to 14.7 million tonnes during January-June 2026, while imports declined around 28% to 7.5 million tonnes.
Demand is expected to recover in 2027, with LPG consumption projected to rise to around 31 million tonnes and imports increasing to nearly 20 million tonnes, driven by improved supply availability.
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