F
or four months now, the numbers have borne out what the energy experts had been foretelling all through February.
The imports of liquefied natural gas in India have increased in the first four months of the financial year due to the increased imports from the US as a result of the problems caused by the West Asia crisis.
As per figures compiled by the Ministry of Petroleum and Natural Gas, LNG imports in April-July have grown to $5.6 billion, up 24% from $4.5 billion for the same four months last year.
However, it’s not even growth across all months – it’s been a steady climb since the crisis began.
India’s July imports of liquefied natural gas grew by 9.1%, jumping from US$1.1 billion in July 2025 to US$1.2 billion.
What’s significant about this is that the growth in prices is well ahead of the growth in gas volume imported. The imports of gas just experienced a slight rise of 1.5% to 2,915 mmscm in the prior year (2,872 mmscm).
The difference between volume growth and cost growth leaves little ambiguity as to where blame lies — price and freight, rather than demand.
Increases in energy prices, which are driven by the West Asia crisis, have driven the increased cost of imports, with the closure of the Strait of Hormuz having affected supplies from Gulf countries and forced India to procure more LNG and LPG from alternative sources, especially the US.
Analysts in the industry have been keen to explain exactly what has contributed to the premium. As one analyst put it, "Freight costs are higher due to the much-longer voyage, and also the underlying commodity cost is being increased by the tight global availability."
This same analyst was also careful not to overly simplify the story: "I will not say that all of the increase in the import bill for India's LNG or LPG is attributable to the change in source of supply. There has been an increase in both international prices and tightness of Middle Eastern supplies, as well as freight and insurance and longer voyages. At present, India is paying a premium for security and diversity."
This is not a slow process, rather it’s a true rush and figures do speak volumes about this.
India has significantly ramped up its imports of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) from the United States due to disruptions associated with the crisis in West Asia affecting supply chains from conventional Gulf suppliers, as per Kpler data, which tracks maritime intelligence.
LPG figures are particularly remarkable. In August, India imported about 0.62 million tonnes of LPG from the US along with 0.89 million tonnes of LPG in July, with the US alone contributing over 73% of the country’s total LPG imports.
It has gone beyond merely increasing its purchases from the US, and is making efforts towards expanding its energy procurement from a much larger basket of countries.
The number of countries from which India procures liquefied natural gas has increased from six to 15, as a strategy to protect itself from the possibility of interruptions in the flow of energy due to the crisis in West Asia.
This increase from six countries to fifteen countries indicates the adoption of an energy policy strategy on the part of India whereby it is making efforts towards creating structural redundancy in its energy import system despite the costs involved.
It is quite interesting that even though this trend of moving towards west-oriented sources of natural gas and LPG has picked up pace, the situation in case of crude oil is completely opposite.
India's reliance on Russia for its crude oil needs has increased despite the looming threat of the Graham bill and other secondary sanctions.
Russia remains India's largest supplier of crude oil despite the looming threats even though India imports 1.9 million barrels of crude oil per day from Russia in August, which is much higher than the amount imported from UAE, which is only 0.61 million tonnes per day.
The reason why the above figures of 24% rise in imports stand out is because just a few months back, the energy import situation for India was entirely on the other end of the scale.
To be more specific, India’s overall import expenditure on oil and gas imports had gone down by 12% during April-October, 2015 compared to the corresponding period of 2014, while specifically the import expenditure on LNG had dropped by 13%, mainly because of subdued natural gas prices and weak demand.
However, the current situation stands out in sharp contrast to the favorable energy market environment which prevailed just months back.
This hike in the LNG bill is not an isolated case; rather, it is simply another example of the larger trend that the Strait of Hormuz situation has created in India's economic environment in 2026.
The same crisis that has caused crude oil to rise to $90 per barrel and weakened the Indian currency to 95 rupees to a dollar is clearly visible now in the import costs of India's gas and LPG. In other words, a single geo-political bottleneck can affect currency market, fuel prices, and now, energy import bills.
A nation that fulfills half its natural gas requirements and 90 percent of its crude oil requirements through imports cannot remain unaffected in such situations.
Considering that the situation at the Strait of Hormuz has not been resolved yet, and US-Iran diplomatic negotiations keep breaking down owing to the demands of compensation, it is unlikely that India’s high LNG import prices would reverse course in the foreseeable future.
The crucial factor will be how successfully India would be able to negotiate long-term contracts using its new 15-nation supplier base and US connections to lower freight and commodities prices. If not, India may keep paying what experts refer to as a “supply security premium.”
