India plans to buy up to a quarter of its liquefied petroleum gas (LPG) imports from the United States in 2027, a move that would cut its reliance on the Middle East and support efforts to secure a trade deal with Washington, according to three sources with knowledge of the matter, as reported by Reuters.
India's LPG Import Diversification Strategy
The world's third-biggest oil importer and consumer bought about 90% of its overall 21.85 million metric tons of LPG imports from the Middle East in 2025, the sources said. Imports accounted for about 66% of India's LPG consumption, according to government data. Higher US energy purchases could help India narrow its trade surplus with Washington, a key demand from President Donald Trump, as New Delhi pushes to complete a long-awaited trade deal with Washington in the next three to four months. India has pledged to increase US energy purchases by $10 billion to $25 billion in the near future, and the two nations have agreed to target $500 billion in bilateral trade by 2030.
Supply Disruption and Emergency Measures
New Delhi faced its worst LPG shortage earlier this year after the Iran war and closure of the Strait of Hormuz disrupted supplies, the sources said. The government invoked emergency measures to divert petrochemical feedstocks from industry to households, which use LPG as cooking gas.
State Refiners to Issue Tenders for US LPG
State refiners Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum are expected to issue tenders within one to two months for US LPG supplies in 2027, the sources added, noting a delegation from the companies is also likely to travel to the United States next month to discuss sourcing. The oil ministry and the three companies did not respond to a Reuters email seeking comment. India has already accelerated spot purchases from the United States and other suppliers to offset reduced Middle East supplies. US LPG imports topped 1 million tons in June for the first time and are likely to exceed India's initial 2026 annual-contract target of 2.2 million tons, the sources said.
Demand and Consumption Trends
Lower supplies from the Middle East curtailed India's LPG consumption to about 14.7 million tons in January–June 2026, down about 8% from a year earlier, while imports fell about 28% to about 7.5 million tons, provisional government data showed. This year India's LPG consumption is expected to decline to 30 million tons due to low supplies, one of the sources said. But LPG imports could rise to about 20 million tons in 2027 as demand recovers to around 31 million tons, the source added.
| Year | Metric | Value |
|---|---|---|
| 2025 | Total LPG imports | 21.85 million tons |
| 2025 | Share from Middle East | 90% |
| 2025 | LPG imports as % of consumption | 66% |
| Jan–Jun 2026 | LPG consumption | 14.7 million tons (−8% YoY) |
| Jan–Jun 2026 | LPG imports | 7.5 million tons (−28% YoY) |
| 2026 (forecast) | LPG consumption | 30 million tons |
| 2027 (forecast) | LPG demand | ~31 million tons |
| 2027 (forecast) | LPG imports | ~20 million tons |
| 2027 (target) | Share from US | Up to 25% |
Trade Deal and Future Outlook
"Diversification of LPG imports is being pursued to ensure supply security and mitigate risks arising from regional disruptions or geopolitical events," junior oil minister Suresh Gopi told lawmakers on Monday, as reported by Reuters. The planned increase in US LPG purchases underscores India's broader strategy to reduce exposure to Middle East supply routes and strengthen energy security, while also supporting bilateral trade negotiations with the United States.
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