The companies signed a medium-term agreement for the supply for 12 LNG cargoes from GDF Suez through 2014. The shipments will total 800,000 tons.
B C Tripathi, chairman and managing director at GAIL, said the agreement would help offset the country's supply deficit.
"GAIL will continue to make assiduous efforts to tie-up affordable LNG in its portfolio to meet the rapidly growing energy demand of the Indian market," he said in a statement.
GDF Suez said it expects the Indian natural gas market will grow 87 percent from 2012-20.
This agreement with GDF Suez is yet another step by GAIL to bridge the demand supply deficit of the Indian market in the medium term," said Tripathi.
GAIL operates more than 5,900 miles of pipelines in India capable of handling around 6 billion cubic feet of natural gas per day.
High demand and grid failures left half of India without power near the end of July.