India announced on Monday that it has finalized a significant agreement with the United States to import almost 10 percent of its liquefied petroleum gas (LPG) requirements, aiming to enhance its energy supply diversity.
Bilateral relations between Washington and New Delhi deteriorated in August when President Donald Trump increased tariffs on India to 50 percent. US officials accused India of supporting Russia’s involvement in the Ukraine conflict by purchasing discounted Russian oil.
President Trump alleged that Indian Prime Minister Narendra Modi had agreed to reduce Russian oil imports as part of a potential trade pact, a claim that has not been officially confirmed by India.
Despite differences on various matters such as agricultural trade and Russian oil procurement, discussions between India and the United States are ongoing.
India’s Minister for Petroleum and Natural Gas, Hardeep Singh Puri, disclosed the signing of a one-year contract for 2.2 million tonnes per annum of LPG from the US Gulf Coast, constituting approximately 10 percent of India’s annual LPG imports. Puri described this deal as the first structured agreement for US LPG in the Indian market.
Puri emphasized the importance of diversifying LPG sourcing to ensure secure and affordable supplies for Indian citizens. He highlighted that the deal opens up one of the world’s largest and fastest-growing LPG markets to the United States.
In a separate development, Indian state-backed refiner HPCL-Mittal Energy ceased Russian crude purchases following US sanctions against Russia’s two major oil companies. Reliance Industries, a leading private Indian buyer of Russian crude, is evaluating the impact of US and EU sanctions.
India’s economy, ranked as the fifth-largest globally, experienced its most rapid growth in five quarters ending on June 30, fueled by increased government expenditure and improved consumer confidence.
However, concerns persist over US tariffs negatively influencing the economy, with analysts warning that these tariffs could potentially reduce GDP growth by 60 to 80 basis points in the current fiscal year if no relief measures are implemented soon.