India plans up to quarter of 2027 LPG imports from US, sources say

• India currently imports about 90% of its 21.85 million metric tons of LPG from the Middle East; imports account for 66% of domestic consumption
• State refiners (Indian Oil, Bharat Petroleum, Hindustan Petroleum) expected to issue U.S. LPG tenders within 1-2 months for 2027 delivery
• The shift aligns with India's pledge to increase U.S. energy purchases by $10 billion to $25 billion and bilateral trade target of $500 billion by 2030

Summary

India plans to source up to 25% of its liquefied petroleum gas (LPG) imports from the United States in 2027, marking a significant strategic shift to reduce dependence on Middle Eastern suppliers. This follows severe supply disruptions earlier in 2026 when the Iran war and closure of the Strait of Hormuz triggered India's worst LPG shortage, forcing emergency measures to divert petrochemical feedstocks to households.

Key Figures:

• India imported 21.85 million metric tons of LPG in 2025, with approximately 90% from the Middle East
• Imports account for 66% of India's LPG consumption
• U.S. LPG imports exceeded 1 million tons in June 2026 for the first time
• 2026 imports are expected to surpass the initial annual contract target of 2.2 million tons

Market Impact:

The supply disruption severely affected India's LPG market, with January-June 2026 consumption falling 8% year-over-year to 14.7 million tons, while imports dropped 28% to 7.5 million tons. Full-year 2026 consumption is projected to decline to 30 million tons, but is expected to recover to 31 million tons in 2027 with imports rising to approximately 20 million tons.

Strategic Implications:

State refiners Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum are expected to issue U.S. supply tenders within 1-2 months. This diversification supports broader U.S.-India trade negotiations, with India pledging to increase U.S. energy purchases by $10 billion to $25 billion, contributing toward a bilateral trade target of $500 billion by 2030. The move addresses President Trump's demand to narrow India's trade surplus with Washington.