India Plans to Double LPG Imports from US to Reduce Gulf Dependence

Indian oil marketing companies (OMCs) are exploring a significant increase in liquefied petroleum gas (LPG) purchases from the United States, as part of a strategy to diversify supply sources and reduce reliance on the Gulf region. The current annual import of 2.2 million tonnes could be doubled under new contracts, according to sources familiar with the discussions.

This move follows a one-year structured contract signed in November 2025, under which India agreed to import nearly 10% of its annual cooking gas requirements from the US for the 2026 contract year. However, the West Asia conflict highlighted the vulnerability of Gulf supplies, as cargoes were stranded during the crisis. The US emerged as a critical alternative, providing a cushion for India's LPG needs.

Beyond diversifying supplies, the increased imports will help India build a strategic reserve. In May, the petroleum ministry directed OMCs to prepare an action plan for creating a 30-day strategic LPG reserve. This reserve would be in addition to the existing 45-day rolling stock maintained by oil retailers to meet domestic and commercial demand.

During the conflict, LPG availability became a major concern, even though crude oil supplies were relatively stable. A senior oil company executive noted, “Besides Gulf nations, there are not many countries that produce LPG. We scouted for alternative sources and managed to secure supplies from the US to meet our requirements during the crisis.” The executive added that the US has “substantial additional LPG export capacity” which India can tap to further diversify.

Data from Kpler shows that India sourced less than 8% of its imported LPG from the US in 2025. This share rose to nearly 12% in January 2026, when the structured contract took effect, then to 13% in February, and jumped to 37% in March as the war disrupted Gulf shipments. The share further increased to 40% in April, 55% in May, and 65% in June. Apart from the US, India also secured LPG from Argentina, Nigeria, and Malaysia during the crisis.

Energy trade has become a key component of US-India relations, particularly after the war, helping to narrow the trade deficit between the two countries. The planned increase in US LPG imports is expected to enhance India's energy security and reduce its vulnerability to regional conflicts.