India will source nearly 10% of its annual LPG imports from the US Gulf Coast. Credit: GreenOak/Shutterstock.com.

Indian state-run refineries Indian Oil, Bharat Petroleum and Hindustan Petroleum have signed their first long-term deal with the US to import 2.2 million tonnes of liquified petroleum gas (LPG) next year. 

Under the agreement, India will source nearly 10% of its annual LPG imports from the US Gulf Coast. It is the first structured LPG contract with the US for the Indian market. 

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This represents a significant increase from last year, when the US provided less than 0.6% of India’s total LPG imports, according to a Bloomberg report. 

India has been negotiating a trade deal with the US to lower the tariffs on Indian goods, partly in response to its Russian oil purchases. 

The tariffs have affected more than half of the Indian goods exported to the US market and have posed a threat to India’s manufacturing sector. 

Phillips 66 will supply two cargoes a month, while Chevron and TotalEnergies will supply one each, the report said, citing traders familiar with the matter. 

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The agreement follows a visit to the US in July by officials from the three Indian refiners for discussions with major US producers. 

India, the world’s second-largest consumer of LPG, has sought to secure stable and varied supply channels amid ongoing trade discussions with the US. 

According to the Ministry of Petroleum and Natural Gas, the deal is part of its broader strategy to secure LPG supplies from diverse sources and ensure energy security for Indian households. 

The government has also continued to subsidise LPG cylinders for eligible beneficiaries, despite global price increases. 

In August this year, the Indian Government sanctioned Rs300bn ($3.4bn) to Indian Oil, Bharat Petroleum and Hindustan Petroleum to cover losses from under-recoveries on domestic LPG sales.