India Eyes 25% US LPG Imports by 2027

India is set to import up to 25% of its liquefied petroleum gas (LPG) from the United States by 2027, marking a significant strategic pivot in its energy sourcing. This move aims to lessen the nation’s substantial dependence on Middle Eastern suppliers, fostering a more diversified import portfolio.

The decision follows a severe LPG shortage experienced earlier this year, precipitated by supply disruptions linked to the Iran war and the closure of the Strait of Hormuz. These events necessitated emergency measures, including diverting petrochemical feedstocks for domestic cooking needs.

Understanding India’s LPG Dependency

India is the world’s third-largest importer and consumer of LPG, with its import profile heavily concentrated in one region. In 2025, approximately 90% of India’s 21.85 million tonnes of LPG imports originated from the Middle East.

State-run refiners, including Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., are preparing to issue bids for US LPG deliveries. These bids for 2027 are anticipated within the next one to two months, with a delegation expected to visit the US to finalize sourcing arrangements.

Driving the Strategic Shift

This increase in US energy purchases is also designed to help India address its trade surplus with the United States, aligning with a key demand from President Donald Trump. New Delhi is actively working to finalize a long-awaited bilateral trade deal with Washington.

India has committed to substantially boosting its energy purchases from the US as part of broader economic goals. Both nations have set an ambitious target for bilateral trade:

– India committed to increasing US energy purchases by $10 billion to $25 billion.

– Both nations aim for $500 billion in bilateral trade by 2030.

To immediately mitigate the decline in Middle Eastern supplies, India has already ramped up its spot purchases from the US and other vendors. US LPG imports surpassed 1 million tonnes in June, and these are projected to exceed India’s initial 2026 annual contract target of 2.2 million tonnes.

Market Impact and Future Projections

The recent supply challenges had a direct impact on domestic consumption. India’s LPG usage decreased by nearly 8% to approximately 14.7 million tonnes between January and June 2026 due to lower Middle Eastern supplies.

However, imports are anticipated to recover significantly. Projections indicate that LPG imports will rise to nearly 20 million tonnes in 2027 as domestic demand stabilizes and grows.