Indian cities can be expected to lead a boom in gas consumption

A global softening of LNG prices and new domestic plans should catalyse greater use of this relatively clean source of energy

- ANIL JAIN

India's recent commitment to purchase 10% of its liquefied petroleum gas (LPG) imports over the course of a year from the US to meet the country's cooking-fuel needs heralds a wider policy approach.

It marks the diversification of our petroleum product purchase basket away from traditional proximate sources in West Asia. The move comes amid ongoing negotiations between India and the US that seek to bring greater parity in trade between the two countries. While it remains to be seen whether the supplies work out cheaper, how do these gel with our medium-to-long-term energy priorities?

Broadly, any move away from our traditional suppliers must have strong commercial underpinnings, be it directly or indirectly by way of trade offsets in other sectors. From here on, we can expect an expansion in India's hydrocarbons trade with the US, especially since the latter has recently approved the setting up of many LNG export terminals.

Natural gas, however, remains a minor source of energy in India, at a little under 6% in our energy mix, while it accounts for a quarter of the global energy cauldron.