India inks first-ever LPG supply contract with US
Deepens energy trade with US amid tariff strain
Washington/New Delhi: India is ramping up its energy imports from the U.S. in a bid to reduce its trade surplus with Washington — a key demand of the Trump administration during trade negotiations with New Delhi.
Union Minister of Petroleum and Natural Gas Hardeep Singh Puri on Monday, announced a deal that will see the United States supply nearly 10% of New Delhi's liquefied petroleum gas (LPG) imports.
State-owned oil companies have signed a 1-year deal to import around 2.2 million tonnes per annum of LPG, from the US Gulf Coast, he said, in a post on X, calling it "a historic first."
This would be the "first structured contract of US LPG for the Indian market" and the purchases would be based on "Mount Belvieu as the benchmark for LPG purchases," he said.
"We believe that this move is for diversifying our LPG sourcing, which is currently concentrated in the Middle East, and also to reduce trade surplus with the US," Nomura's equity analyst for energy Bineet Banka said.
India's total LPG imports are around 20-21 million tons annually, he said, adding that if 10% of that supply is sourced the US, at current prices, it implies an incremental import of $1 billion from the US. Though Banka said that the incremental imports are "not much" compared with the India's trade surplus of $40 billion with the US. Since August, ties between the US and India have been strained after Washington imposed a tariff of 50% on Indian goods. Reciprocal tariffs of 25% were imposed on Indian goods as part of a broad strategy to address trade imbalances and
boost domestic industries, while the other 25% was due to India's import of Russian oil.
