India inks first structured US LPG supply contract; PSUs to import 2.2 MTPA in 2026: Puri

India has signed its first structured contract to import liquefied petroleum gas (LPG) from the United States, Union Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Monday.

State-run IndianOil, Bharat Petroleum and Hindustan Petroleum have jointly finalised a one-year agreement to source around 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast for the contract year 2026.

The contracted volume is equivalent to nearly 10% of India’s annual LPG imports.

Puri said the contract will strengthen energy security and diversify sourcing for one of the world’s fastest-growing LPG markets.

Calling it a “historic first”, Puri said Indian officials had held months-long discussions with leading US producers before concluding the deal.

The agreement uses Mount Belvieu as the benchmark for the supplies, he said.

India has been diversifying its LPG sourcing to ensure “secure and affordable supplies”, the minister said.

Puri added that the government has ensured that domestic consumers, particularly beneficiaries of the Pradhan Mantri Ujjwala Yojana, remain insulated from global price spikes.

“Even as international prices soared by over 60 per cent last year, Ujjwala consumers continued to receive LPG cylinders at just ₹500–550, while the actual cost was over ₹1,100,” he said.

The government absorbed over ₹40,000 crore in costs last year to shield households, he added.

The LPG supply contract is seen as a step forward in the ongoing negotiations for the Bilateral Trade Agreement, which aims to more than double trade volumes to $500 billion by 2030.

US President Donald Trump last week said the United States is “pretty close” to finalising a “fair trade deal” with India, and he would lower the tariffs “at some point.”

“We're making a deal with India, much different deal than we had in the past. So right now, they don't love me, but they'll love us again,” Trump said during a ceremony in the Oval Office where Sergio Gor was sworn in as US Ambassador to India by Vice President J.D. Vance.

NITI Aayog CEO B.V.R. Subrahmanyam recently indicated that some positive news on the proposed BTA could emerge by the end of November.

“I think things have been a bit difficult with the United States, and I think a reset is being tried. The trade negotiations are on... Hopefully, by end of the month, we may hear some news on that front,” he said at CNBC-TV18’s Global Leadership Summit.