India Resumes LPG Imports from Iran Amid Supply Disruptions

India has made a significant move by resuming imports of liquefied petroleum gas (LPG) from Iran, marking a shift in its energy procurement strategy after years of sanctions. This decision comes in response to ongoing supply disruptions in the Strait of Hormuz, which have prompted New Delhi to explore alternative energy sources. The LPG shipment, originally destined for China, has been redirected to India, highlighting the impact of geopolitical pressures on energy supplies. With the country facing a severe LPG supply crunch, authorities are prioritizing household consumption and rationing supplies to industries. This development reflects India's evolving energy policy in light of immediate supply needs and changing global dynamics.

By Narendra Chaudhary Mar 26, 2026, 18:27 IST

India's Strategic Shift in Energy Imports

For the first time in several years, India has restarted its imports of liquefied petroleum gas (LPG) from Iran. This decision comes as ongoing disruptions in the Strait of Hormuz compel New Delhi to seek alternative energy sources. The United States, under President Donald Trump, has provided a temporary 30-day sanctions waiver to help stabilize global oil and gas markets, facilitating this significant shift in India's energy procurement strategy.

India had previously ceased energy imports from Iran in 2019 due to Western sanctions, making this recent development noteworthy. The urgency of the situation is underscored by supply disruptions in the Gulf region, where escalating conflicts have severely affected shipping routes and fuel availability.

Reports indicate that the LPG shipment, which is being transported by a sanctioned vessel, was initially intended for China but has been redirected to India due to the ongoing crisis. The tanker is set to dock at the western port of Mangalore, marking a rare instance of energy supplies being rerouted in response to geopolitical pressures.

Sources suggest that the cargo was acquired through a trading intermediary, with payments likely to be made in Indian rupees. This method helps navigate the complexities posed by international sanctions and financial restrictions. Furthermore, India is considering the possibility of increasing LPG imports from Iran if supply issues continue.

The imported LPG will be allocated to major state-run fuel retailers, including Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited, ensuring a stable domestic supply, especially for household cooking fuel.

As the world's second-largest LPG importer, India is currently experiencing one of its most significant supply shortages in decades. The nation consumes over 33 million metric tonnes of LPG annually, with imports fulfilling nearly 60% of its demand. A substantial portion of these imports typically comes from the Middle East, making the ongoing conflict particularly disruptive.

To address the crisis, authorities have begun rationing LPG supplies to industries, prioritizing household consumption. Simultaneously, efforts are being made to clear stranded shipments in the Strait of Hormuz, with several tankers being redirected or reloaded to ensure a continuous supply.

While some government officials have downplayed their awareness of direct Iranian imports, the overall trend indicates a pragmatic shift in India's energy policy, driven by immediate supply needs and changing geopolitical circumstances.