India plans to cut imports of liquefied petroleum gas from the Middle East as its state refiners look to boost purchases from the US, sources with knowledge of the matter said, bolstering New Delhi’s efforts to secure a broader trade deal with Washington.
The state refiners have already informed their traditional suppliers of LPG in Saudi Arabia, United Arab Emirates, Kuwait and Qatar about the likely cut in LPG purchases, the sources, who spoke on condition of anonymity, said.
The planned size of the LPG supply reduction from the Middle East wasn’t clear, but Reuters reported in July that India aims to source about 10 per cent of its cooking gas imports from the US beginning in 2026.
During Prime Minister Narendra Modi’s visit to Washington in February, India pledged to raise US energy purchases from $10 billion to $25 billion, with both nations targeting $500 billion in bilateral trade by 2030.
Indian officials are currently in Washington for trade talks.
India’s trade surplus with the US is a key irritant for President Donald Trump, who has imposed a 50 per cent tariff on Indian goods – with 25 percentage points of that total specifically levied to penalise New Delhi for purchases of Russian oil.
Washington says Moscow is using petroleum revenue to fund its war against Ukraine.
Trump on Wednesday said Modi has assured that India will stop buying Russian oil.
Indian state refiners and Middle Eastern producers in Kuwait, Qatar and UAE did not respond to Reuters emails seeking comment. Saudi Aramco declined comment.
The sources said LPG will be sourced on a delivered basis from the US
LPG is a mix of propane and butane used as cooking fuel and is mainly imported by state retailers Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp and sold at a subsidised price to households.
Indian state refiners are jointly seeking to buy about 2 million metric tons of US LPG in 2026 through tenders.
In 2024, the South Asian nation imported about 65 per cent of its LPG consumption of 31 million tons, according to the government data.
The refiners imported about 90 per cent of their 20.4 million tons under term deals with countries including the UAE, Qatar, Kuwait, and Saudi Arabia.
This year, India has bought some parcels of US LPG, taking advantage of the arbitrage window as China, locked in a tariff war with Washington, slowed purchases.
In April, Reuters reported that India plans to scrap import tax on some US products, including LPG, as part of a broader trade deal.
In 2024, India imported 8.1 million tons of LPG from UAE, 5 million tons from Qatar, 3.4 million tons from Kuwait, and 3.3 million tons from Saudi Arabia, the sources said. The nation also bought small quantities from Bahrain and Oman.
