India has taken a significant step toward strengthening its energy security by signing its first structured long-term contract to import liquefied petroleum gas (LPG) from the United States. The move comes at a time of rising global volatility in energy markets and reflects New Delhi’s strategy of diversifying supply sources.
On 17 November 2025, Union Petroleum and Natural Gas Minister Hardeep Singh Puri made the announcement.
A historic first!
One of the largest and the world’s fastest growing LPG market opens up to the United States.
In our endeavour to provide secure affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing.
In a significant development,…
— Hardeep Singh Puri (@HardeepSPuri) November 17, 2025
This marks a major shift in the country’s sourcing pattern and reduces dependence on traditional suppliers in West Asia.
Deal Benchmarked
The contract is notable for being India’s first structured LPG purchase deal benchmarked to Mont Belvieu, the key pricing hub for LPG in the United States. A joint delegation from Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) visited the US in recent months to negotiate terms with leading American producers. Their efforts resulted in what Puri described as a “historic first” for India’s energy supply chain.
Rising LPG Demand
India is the world’s second-largest consumer of LPG, with demand increasing due to growing household adoption and the expansion of the Pradhan Mantri Ujjwala Yojana. Under the scheme, millions of low-income households have received subsidised LPG connections, significantly boosting domestic consumption. As the country imports over 50% of its total LPG requirement, securing diversified and stable supply sources has become essential.
Government Absorbed Price Surge
The government has focused on shielding consumers from volatile global prices. Puri highlighted that, despite international LPG prices rising by more than 60% last year, Ujjwala beneficiaries continued to pay only Rs 500–550 per cylinder while market prices touched Rs 1,100. The government absorbed the remaining cost burden, spending more than Rs 40,000 crore to protect households from the surge.
India–US Energy Cooperation Expected to Grow
Officials say the new US deal strengthens India–US energy cooperation and reduces supply-chain risk by balancing sourcing across multiple geographies. With LPG demand expected to grow, especially in rural areas, the government plans to continue diversifying supply sources to ensure secure, affordable, and reliable access for Indian consumers.
