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India has announced it will dramatically increase purchases of US liquefied petroleum gas, as New Delhi seeks to ease trade tensions with Washington and win relief from President Donald Trump’s punitive tariffs.
Hardeep Puri, India’s oil minister, on Monday announced what he called the “first structured contract of US LPG for the Indian market”, under which New Delhi will buy 2.2mn tonnes of gas from the US Gulf Coast, equivalent to about 10 per cent of annual LPG imports.
India imported about 21mn tonnes of LPG worth $14.5bn in the fiscal year ended March 2025, according to government data, with the US accounting for around 0.5 per cent.
“A historic first!” Puri gushed in a post on social media platform X on the new deal. “One of the largest and the world’s fastest-growing LPG markets opens up to the United States.”
The two sides have been deadlocked over a long-sought trade deal, with Indian exports facing one of the highest tariff rates imposed under Trump’s trade offensive.
“There is no economic rationale for importing [LPG] from the US,” said Lydia Powell, who tracks India’s energy imports at the Observer Research Foundation, a New Delhi-based think-tank.
“The gains will be political rather than economic,” she said, noting that Gulf supplies would “be cheaper for India given the distance”.
India’s energy imports have been a particular source of frustration for Trump, who has imposed a punitive 25 per cent tariff on New Delhi over its purchases of discounted Russian petroleum, on top of his “reciprocal” tariff rate of 25 per cent.
India’s exports to the US, its biggest market, fell 8.6 per cent year on year to $6.3bn in October, government data released on Monday showed. India’s total exports were down 0.7 per cent at $72.9bn.
India is one of the world’s biggest importers of crude oil, natural gas and LPG, and remains highly dependent on foreign suppliers.
The country has traditionally relied on Gulf states, including Qatar and the United Arab Emirates, for LPG and liquefied natural gas. UAE accounted for more than 40 per cent of India’s LPG imports in the last fiscal year.
A petroleum byproduct that is composed mainly of propane and butane, LPG is a relatively clean fuel for cooking and heating, and the Indian government offers generous subsidies to encourage its use by poor people.
New Delhi has become the largest consumer of Russia’s seaborne crude oil since Moscow’s full-scale invasion of Ukraine in 2022, taking advantage of western price caps. Trump has been pushing India to halt purchases of discounted Russian crude, which he says is financing Moscow’s war machine.
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While Trump has said his government is close to signing a deal with India, neither side has shared details and they remain divided over issues such as access to India’s vast agricultural and dairy markets.
Last month, India’s foreign ministry said New Delhi was interested in expanding energy purchases from the US.
Indian public and private refiners, led by Reliance Industries, owned by Asia’s richest man Mukesh Ambani, have also begun cutting oil purchases from Russia after the US last month imposed sanctions on the two largest Russian producers, Rosneft and Lukoil.
A western diplomat briefed by Reliance, which operates the world’s largest oil refinery, said the company had confirmed it would stop buying Russian crude completely.
