In a move that could reshape its energy trade dynamics, India is planning to remove import taxes on U.S.-sourced ethane and liquefied petroleum gas (LPG). The decision is seen as a strategic effort to deepen energy ties with the United States, ease trade tensions, and reduce dependency on Middle Eastern fuel supplies.
At present, India levies a 2.5% duty on these imports, but officials are considering waiving it entirely. Ethane plays a critical role in petrochemical manufacturing, while LPG is widely used in households across the country for cooking fuel. The policy shift could also extend to liquefied natural gas (LNG) imports from the U.S., reflecting India’s broader intent to expand its energy sourcing options.
Reliance Industries, a key player in India’s energy sector, already sources significant quantities of ethane from the U.S., despite facing logistical hurdles. By lowering import costs, India aims to make American energy more competitive and support domestic industries reliant on affordable raw materials.
Meanwhile, American cotton exports to India have surged dramatically. U.S. upland cotton shipments to India hit a 2.5-year high earlier this year, rising sixfold compared to the previous year. The spike is largely attributed to falling cotton yields in India and steep Chinese tariffs—up to 125%—which have redirected U.S. cotton from China to India’s textile market.
With lower prices and superior fiber quality, American cotton has become an attractive alternative for Indian manufacturers. These developments signal a growing realignment in India-U.S. trade, driven by shared economic interests and shifting global trade dynamics.
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