On November 17, 2025, the Indian Minister of Petroleum and Natural Gas, Hardeep Singh Puri, announced a significant agreement to purchase 2.2 million metric tons of Liquefied Petroleum Gas (LPG) from the United States in 2026. This deal represents approximately 10% of India’s annual LPG imports and marks the first-ever LPG procurement contract between Indian state-owned oil companies and the United States.
This move by India is not only aimed at diversifying its energy sources but also at reducing its trade deficit with the United States. This was a key demand put forward during trade negotiations between the Trump administration and India.
Puri released a statement on the social media platform X, stating that India is actively working towards diversifying its LPG procurement channels, with the recent milestone achieved being the energy agreement with the United States.
According to Puri’s statement, Indian state-owned oil companies have successfully finalized a one-year agreement to import around 2.2 million metric tons of LPG from the United States in 2026, accounting for approximately 10% of India’s annual import volume. This marks a “historic first.”
“This is the first structured supply agreement of U.S. LPG in the Indian market,” he said. “Over the past few months, a team comprising officials from Indian Oil, Bharat Petroleum, and Hindustan Petroleum visited the United States and held multiple rounds of discussions with major American producers, with the negotiations now concluded.”
CNBC reported that Bineet Banka, an energy sector stock analyst at Nomura Securities, commented, “We believe this move is to diversify LPG sources, as India’s LPG supply is mainly concentrated in the Middle East, and also to reduce the trade deficit with the U.S.”
He noted that India’s annual LPG import total is around 20 to 21 million metric tons. If 10% of this supply comes from the U.S., at current prices, this would mean an additional $1 billion worth of products imported from the United States. However, Banka also mentioned that compared to India’s $40 billion trade deficit with the U.S., this additional import is “not significant.”
President Trump previously referred to India as the “tariff king” and has been seeking for India to lower tariffs on American agricultural products, alcoholic beverages, and automobiles, and provide greater market access for U.S. companies.
In August of this year, President Trump announced an increase in tariffs on India to 50%, citing India’s extensive purchases of Russian oil. In September, Trump intensified criticisms of India, calling the trade relationship with India a “complete and total disaster!” In the same month, Indian Minister of Commerce Piyush Goyal, who was engaged in trade negotiations in the U.S., reportedly mentioned that India would increase its energy product trade with the U.S. in the coming years.
Subsequently, there has been some easing of tensions between the two parties. On November 10th, President Trump stated, “Due to the imports of Russian oil, the tariffs imposed on India are indeed high, but they have now significantly reduced Russian oil imports, so we will reduce tariffs.”
The President also mentioned that the U.S. and India are very close to reaching a trade agreement.
Nomura Securities’ Asian economic team stated that if India reduces its imports of Russian crude oil and ultimately reaches a trade agreement with the U.S., benefiting from reduced U.S. tariffs, India could stand to gain. The organization predicts that the punitive 25% tariff imposed by the U.S. on India for purchasing Russian oil will be lifted after November, while the 25% retaliatory tariff will continue until the 2026 fiscal year.