India Likely to Import 20.82 Million Tonnes of LPG in FY27

Why It Matters

The heavy import dependence makes India vulnerable to supply shocks and price volatility, prompting a strategic push for diversification and domestic production to safeguard energy security.

Key Takeaways

• India to import 20.82 mt LPG in FY27, 60% of demand.
• FY27 LPG consumption projected at 34.69 mt, 4.5% growth YoY.
• Over 90% of imports come from Middle East Gulf region.
• West Asia conflict threatens Strait of Hormuz LPG transit.
• Govt boosts domestic LPG output and piped natural gas.

Pulse Analysis

India’s LPG market has become a cornerstone of household energy, with roughly 33.37 crore families relying on the fuel for cooking. Consumption climbed to 34.69 million tonnes in FY27, driven by the continued rollout of the PM Ujjwala Yojana and rising per‑capita demand. The 4.5% annual growth marks the strongest increase since FY19, underscoring LPG’s entrenched role in India’s energy mix and its importance for policymakers monitoring fuel affordability and emissions targets.

Supply dynamics, however, remain precarious. More than 60% of India’s LPG needs are satisfied through imports, and over 90% of those imports originate from the Middle East Gulf. The February 2026 flare‑up in West Asia has exposed the vulnerability of this reliance, as the Strait of Hormuz—a chokepoint for most cargoes from the UAE, Saudi Arabia and Oman—faces heightened security risks. Alternative sources such as the United States, Russia, and Australia are being explored, but longer transit times and limited existing contracts mean diversification will take time to offset the immediate exposure.

In response, the Indian government is accelerating domestic production and promoting a shift toward piped natural gas (PNG). Refiners have been instructed to prioritize LPG output, lifting daily production to roughly 46,000‑47,000 tonnes, while imports have dipped to about 30,000 TPD. Simultaneously, incentives for PNG adoption aim to reduce cooking‑fuel imports and curb emissions. These measures are expected to temper price volatility, improve energy security, and gradually reshape India’s LPG landscape over the next few years.