Up 5.3% year on year! India's LNG imports rose between April and July

【ICIS Singapore Dispatch】According to preliminary official Indian data, India's LNG imports reached 11.86 billion cubic meters from April to July 2026, posting a modest year-on-year growth of 5.3%. The import growth was mainly used to fill the gap in domestic natural gas production, rather than being driven by a substantial surge in terminal demand, as overall domestic natural gas consumption remained stable.

Looking at the monthly import data, India's LNG imports stood at 2.47 billion cubic meters in April, rose to 2.96 billion cubic meters in May, climbed further to 3.52 billion cubic meters in June, and fell back to 2.91 billion cubic meters in July, showing a trend of first increasing and then stabilizing.

Import growth stems from domestic gas production contraction, with overall gas demand nearly flat

The core driver behind the rebound in import volume this time is not the expansion of market demand, but the continuous shrinkage of local natural gas supply. Data shows that India's total natural gas consumption from April to July was about 23 billion cubic meters, with only a slight year-on-year increase of 0.4%, and overall demand remained stable. Against this background, LNG imports effectively filled the domestic supply-demand gap. During the statistical period, imported gas accounted for more than half of the total domestic consumption, becoming the core support for ensuring domestic gas supply.

This supply-demand pattern has clearly reversed compared to the 2025-2026 fiscal year. In the previous fiscal year, India's LNG imports totaled 34.22 billion cubic meters, a year-on-year decrease of 4.2%. Imports fell to a low of 1.95 billion cubic meters in March, mainly affected by the blocked shipping in the Strait of Hormuz and the suspension of LNG loading operations in the Middle East. In the same period, India's domestic natural gas production fell 3.5% year-on-year to 34.33 billion cubic meters, and terminal gas demand also shrank 3.9% to 68.54 billion cubic meters, presenting a situation of weak supply and weak demand in the overall market.

Weak monsoon and high temperatures push up rigid gas demand in the fourth quarter

According to meteorological monitoring data from the India Meteorological Department (IMD), from June 1 to August 26 this year, India's cumulative monsoon rainfall was only 577.8 millimeters, 13% less than the long-term average of 664.7 millimeters. The precipitation deficit was concentrated in eastern, northeastern and southern peninsular India, with precipitation in these two regions 27% and 22% lower than normal respectively.

Meteorological agencies predict that India's rainfall will continue to be low in September, accounting for less than 91% of the long-term average. At the same time, the El Niño phenomenon in the equatorial Pacific continues to strengthen, and the monthly average maximum and minimum temperatures in most parts of the country will be higher than the same period in normal years.

The持续少雨、高温天气直接导致全国水库蓄水大幅缩水。India's Central Water Commission data shows that the current effective water storage capacity of national reservoirs is 125.3 billion cubic meters, accounting for only 67.83% of the total storage capacity, compared with 153.08 billion cubic meters in the same period last year. By region, the water storage rate of reservoirs in the south is only 57.34%, far lower than 85.58% in the same period last year; the water storage rate in the north is 60.16%, also significantly lower than the 90% level of last year.

Inadequate monsoon rainfall and falling reservoir water levels will lead to a significant decline in hydropower output after the monsoon season. Coupled with the持续高温 across the country, power supply will rely more on thermal power as a backup, and domestic gas demand is expected to strengthen further in the fourth quarter.

Fertilizer capacity expansion continues to underpin LNG demand

In addition to rigid power demand, the fertilizer industry's gas consumption has become an important support for India's LNG consumption. The Indian Cabinet Committee on Economic Affairs has finalized the plan for新增气基尿素产能, planning to build 8 to 9 new gas-based urea plants, with an新增 production capacity of about 10 million tons.

Normally, in years with less monsoon rainfall, the sown area of autumn and winter crops will increase in areas with sufficient irrigation conditions, which will support urea consumption, stabilize the natural gas procurement demand of the fertilizer industry, and provide sustained support for LNG imports.

High prices may limit spot purchases, with imports mainly based on long-term contract rigid demand

Currently, Asian LNG spot prices have continued to rise since late August, becoming the core factor restricting India's import growth. Historical data shows that faced with high spot prices, India's power and industrial users usually reduce their spot procurement volumes. Therefore, India's LNG imports at this stage mainly rely on long-term contract resources, focusing on meeting rigid rigid demands such as urban gas and fertilizer production, and the market activity of low-priced and flexible spot procurement is limited.