Washington/New Delhi: India is increasing its energy imports from the United States to address its trade surplus with Washington, a significant requirement of the Trump administration during trade talks with New Delhi. On Monday, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri announced a deal that will allow the U.S. to supply nearly 10% of New Delhi’s liquefied petroleum gas (LPG) imports. State-owned oil companies have finalized a one-year agreement to import approximately 2.2 million tonnes of LPG annually from the U.S. Gulf Coast, which Puri referred to on X as “a historic first.” This will mark the “first structured contract of U.S.
LPG for the Indian market,” with purchases guided by “Mount Belvieu as the benchmark for LPG purchases,” he stated. Nomura’s equity analyst for energy, Bineet Banka, noted that this initiative aims to diversify LPG sourcing, which is currently heavily reliant on the Middle East, while also working to reduce the trade surplus with the U.S. India’s annual LPG imports are around 20-21 million tons, and sourcing 10% from the U.S., at current prices, could lead to an additional import of $1 billion from the U.S. However, Banka remarked that this increase is relatively minor compared to India’s trade surplus of $40 billion with the U.S. Relations between the U.S.
and India have been tense since August when Washington imposed a 50% tariff on Indian goods. In response, India implemented reciprocal tariffs of 25% on U.S. products as part of a broader strategy to rectify trade imbalances and support domestic industries, with an additional 25% tariff stemming from India’s purchase of Russian oil.