India on Monday announced it had signed a “significant” agreement for the United States to supply nearly 10 percent of its liquefied petroleum gas (LPG) imports, as the country moves to diversify its energy sources.
The deal comes amid strained relations between Washington and New Delhi after President Donald Trump raised tariffs on Indian goods to 50 percent in August, accusing India of aiding Russia’s war in Ukraine by purchasing discounted Russian crude. Trump has also claimed that Prime Minister Narendra Modi agreed to reduce Russian oil imports as part of an anticipated trade deal — a claim India has not publicly confirmed.
Despite ongoing disagreements over agricultural trade and India’s continued import of Russian oil, both countries remain engaged in negotiations.
Petroleum and Natural Gas Minister Hardeep Singh Puri said the one-year contract covers 2.2 million tonnes of LPG sourced from the US Gulf Coast, representing “close to 10 percent” of India’s annual LPG imports. He described it as “the first structured contract of US LPG for the Indian market”.
Puri said the agreement reflects India’s commitment to securing reliable and affordable LPG supplies, adding that “one of the largest and the world’s fastest-growing LPG markets opens up to the United States”.
India has begun adjusting some of its energy sourcing practices. In October, state-backed refiner HPCL-Mittal Energy suspended purchases of Russian crude after Washington imposed sanctions on Moscow’s two biggest oil companies. Reliance Industries, the country’s largest private buyer of Russian oil, has also said it is reviewing the impact of US and EU restrictions.
India’s economy — the world’s fifth-largest — recorded its fastest growth in five quarters in the period ending June 30, supported by increased government spending and improved consumer demand. However, analysts warn that the US tariffs could reduce GDP growth by 60 to 80 basis points this fiscal year if no relief is granted soon.
