India to import 10% of its cooking gas from US from 2026 marks a major pivot in India’s energy strategy. New Delhi plans to source a tenth of its liquified petroleum gas (LPG) from the U.S., starting in 2026, as part of efforts to diversify supply, reduce dependency on the Middle East, and help shrink a large trade deficit with Washington
🚢 Why Now?
- Diversification need: Over 90% of India’s LPG, about 20.5 million tonnes in 2024, came from the Middle East
- Global market dynamics: China’s tariffs on U.S. propane opened arbitrage opportunities that India capitalized on, with state refiners beginning imports in May
- Trade deficit strategy: India aims to boost U.S. energy imports by $10 billion, contributing to a mutual target of $500 billion bilateral trade by 2030
📈 What’s Changing?
| Factor | Details |
|---|---|
| Proportion | ~10% of India’s LPG will come from the U.S. by 2026 |
| Suppliers | IOC, BPCL, HPCL began U.S. LPG purchases in May, with potential duty exemptions on propane/butane |
| Logistics | Preference for delivered U.S. shipments to reduce freight risk, similar to crude oil imports |
| Demand trends | LPG use rising at ~5–6% annually; imports expected to reach 22–23 million tonnes by 2026 |
🛢️ Energy & Geopolitical Implications
- Energy security: Diversified LPG supply strengthens India’s energy resilience
- Trade leverage: U.S. energy imports serve dual economic and diplomatic roles under growing India–U.S. trade cooperation
- Cost benefits: U.S. LPG is becoming more price-competitive due to Chinese tariffs, offering savings of $20–30 per tonne
🔮 What Happens Next?
- Finalizing volumes: India’s refiners will finalize U.S. LPG import volumes based on price and logistics in the coming months.
- Import-tax removal: The government is considering eliminating import duties on U.S. propane and butane to encourage imports
- Trade negotiations: LPG imports could be part of a broader deal aimed at lowering tariffs and balancing trade with the U.S.
🧭 Bottom Line
India’s decision to import 10% of its cooking gas from the U.S. by 2026 is more than an energy strategy—it’s a calculated step to diversify supply, cut freight burdens, and strengthen global trade ties. With energy demand rising and geopolitical volatility on the rise, blending U.S. LPG into India’s portfolio could reshape energy security and deepen bilateral economic relations.
