India opens its LPG market to the US for a year

In a significant development, India’s state-owned oil refiners have successfully concluded a one-year deal for the import of around 2.2 million tonnes of liquified petroleum gas (LPG) from the US Gulf Coast.

The decision was revealed India’s oil minister Hardeep Singh Puri on the social media platform X.  Before this deal, India used to levy a 2.5% import tax on LPG, ethane, propane and butane.

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

The deal between Indian Oil Corporation Limited (IOC), Bharat Petroleum Corporation Limited (BPCL) and

Hindustan Petroleum Corporation Limited (HPCL) would mark the first structured contract by Indian companies to buy American LPG.

The cost of the LPG would be benchmarked to Mount Belvieu, a city 33 miles from Houston, Texas, which is also a renowned hub for natural gas products.

In the fiscal year ended March 2025, India consumed nearly 31 million tonnes of LPG, 60% of which was imported.

More than 90% of imports came under long-term deals with Middle East producers, nations that are far closer than the US.

“In our endeavour to provide secure affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing,” Puri said in his post today.

While it may cost more to ship the LPG to India, the deal between the oil market companies and American producers may revive the hope for a broader trade deal between the two countries, nearly three months after it was roiled by US President Donald Trump’s decision to impose a 50% tariff, including a penalty for buying Russian oil.