India eyes ending import tax on US ethane and LPG in trade talks, sources say

Currently, India imposes a 2.5% duty on imports of ethane and LPG components like propane and butane. In the 2023-24 fiscal year, the country imported 18.5 million metric tons of LPG, worth $10.4 billion, primarily from the Middle East. India is the second-largest importer of U.S. ethane after China, with Reliance Industries being the major Indian buyer. However, infrastructure limitations, such as inadequate shipping capacity and processing facilities, could hinder a near-term increase in imports.

The potential tax elimination is also linked to broader plans to increase U.S. LNG imports. India and the U.S. aim to finalize the first phase of a trade deal by the end of the year, targeting $500 billion in bilateral trade by 2030.Final decisions on tax cuts will be made by India’s commerce and finance ministries.