India Targets 25% US Share in LPG Imports by 2027

India is set to significantly increase its imports of liquefied petroleum gas (LPG) from the United States, with the country planning to source up to 25% of its LPG requirements from the US by 2027 as part of a broader strategy to diversify energy imports and reduce dependence on the Middle East. The move is expected to strengthen India's energy security while also supporting ongoing efforts to conclude a bilateral trade agreement with Washington. The shift follows supply disruptions earlier this year that exposed the risks associated with relying heavily on a single region for fuel imports.

The decision comes after India faced its worst LPG shortage in recent years, triggered by supply disruptions linked to the Iran conflict and the temporary closure of the Strait of Hormuz. The crisis forced the government to introduce emergency measures, including diverting petrochemical feedstocks from industrial use to ensure uninterrupted LPG supplies for households. India remains the world's third-largest importer and consumer of LPG, with government data showing that nearly 66% of domestic consumption is met through imports. In 2025, around 90% of the country's 21.85 million tonnes of LPG imports originated from the Middle East.

According to a Reuters report, state-owned refiners Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd. (BPCL) and Hindustan Petroleum Corporation Ltd. (HPCL) are expected to invite bids within the next one to two months for US LPG deliveries scheduled for 2027. A joint delegation from the three companies is also likely to visit the United States next month to hold discussions with suppliers and strengthen long-term sourcing arrangements. The proposed procurement marks a significant shift in India's energy import strategy as it seeks to build a more diversified supply chain.

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The increase in US energy purchases is also expected to support trade negotiations between New Delhi and Washington. India is aiming to finalise a long-awaited trade agreement with the United States within the next three to four months, while increased imports of American energy could help reduce India's trade surplus with the US, a key concern repeatedly raised by President Donald Trump. India has already committed to increasing its purchases of US energy by between $10 billion and $25 billion, with both countries targeting bilateral trade worth $500 billion by 2030.

India has already stepped up spot purchases of LPG from the United States and other suppliers to offset declining shipments from the Middle East. According to the report, US LPG imports crossed one million tonnes for the first time in June and are expected to exceed India's initial annual contract target of 2.2 million tonnes for 2026. The diversification effort reflects India's broader objective of ensuring a stable fuel supply amid geopolitical uncertainties and potential disruptions in traditional export routes.

Meanwhile, India's LPG consumption fell to around 14.7 million tonnes during the first half of 2026, representing a decline of nearly 8% compared with the same period last year due to constrained supplies from the Middle East. Preliminary official data also showed that imports dropped by almost 28% to around 7.5 million tonnes. Industry estimates suggest overall LPG consumption could decline to approximately 30 million tonnes this year before recovering to around 31 million tonnes in 2027, with imports expected to rise to nearly 20 million tonnes as demand rebounds and alternative supply sources become more firmly established.

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