INDIA TO SOURCE 10% OF LPG IMPORTS FROM THE US: A ‘HISTORIC FIRST’

NEWS  – India has signed its first-ever structured one-year contract to import 2.2 MTPA of LPG from the United States, accounting for around 10% of India’s annual LPG imports, marking a significant diversification in its energy basket.

HIGHLIGHTS

India’s Energy Import Status

• India is the world’s 3rd-largest crude oil consumer with 88% import dependence.
• Over 60% of LPG, used mainly for cooking, is imported from West Asian suppliers like Saudi Arabia, UAE, Qatar, and Kuwait.
• India also imports ~50% of its LNG needs.

Key Highlights of the Deal

• Public sector refiners IOC, BPCL, HPCL jointly awarded contracts to Chevron, Phillips 66, TotalEnergies.
• Expected to diversify supply sources and reduce dependence on West Asia.
• Supports India’s push to expand LPG penetration among rural and poor households.

Trade Context: Tariffs & Negotiations

• The US earlier imposed 50% tariffs on Indian goods citing trade imbalance.
• India’s trade surplus with the US halved to $1.45 billion (Apr–Oct).
• India’s exports to the US fell 9% in October due to tariffs.
• India has submitted its final proposal for a bilateral trade agreement.

LPG vs CNG

• LPG: Propane + butane; used mainly for cooking.
• CNG: Methane-rich; used as a transportation fuel.

Economic Impact

• US tariffs hit textiles, engineering goods, and other labour-intensive exports.
• Govt launched the Export Promotion Mission (₹25,060 crore) and expanded credit to exporters.

Significance for India–US Energy Relations

• The US is India’s 5th-largest crude supplier and 2nd-largest LNG supplier.
• Increasing US energy imports helps:
  • Strengthen bilateral ties
  • Reduce price vulnerability
  • Support energy security amid rising domestic demand