The US-Israel-Iran war impact on India is reducing India’s LPG supply affecting commercial kitchens, hospitality businesses and fuel-intensive industries such as rum dropping and tile manufacturing units. With India heavily dependent on Gulf imports for crude oil, LNG and fertilizers most of which pass through the critical Strait of Hormuz, the ongoing war in Iran poses serious risks to the country’s energy security, supply chains and trade stability.
The US-Israel-Iran war has remarkably impacted India's energy security causing LPG shortages, rising gas prices and potential industrial slow downs due to disturbances in the Strait of Hormuz. Through the region, 80-90% of India's LPG imports pass. Delays in commercial LPG deliveries have extended to 2 to 8 days which are affecting restaurants and industries. Domestic LPG prices rose by ₹60 and commercial cylinders rose by ₹114-₹115. Also, the war threatens to spike inflation, widen the current account deficit and strain government finances due to increased subsidies. The growing conflict between the United States, Israel and Iran since late February 2026 has raised serious concerns for India’s energy security, as a large portion of the country’s oil and gas imports pass through the strategically important Strait of Hormuz. Its effect on the LPG cooking gas supply, energy security, oil prices and industries dependent on Gulf energy routes.
What is the Iran and Israel War?
The Iran and Israel war Operation Roaring Lion refers to the large-scale military campaign launched on 28 February 2026. It is a major military conflict involving US and Israeli air strikes against Iran which aimed at destroying its nuclear capabilities and regional influence. The war has resulted in massive destruction, widespread regional disruption, attacks on Gulf infrastructure and increase in oil prices. Within the first two weeks, over 1,300 people were killed in Iran and more than 3 million people were displaced. This has affected global trade because the middle east is a major provider of energy resources to many countries including India.
Impact of US-Israel-Iran War on India
The war in Iran has disrupted India's LPG supply, impacting commercial kitchens and industries like rum distilleries. The US-Israel-Iran War conflict threatens India's energy security, fertilizer supply and trade as it is heavily dependent on Gulf oil, LNG and fertilizer inputs. The US-Israel-Iran war has affected India in many ways. There have been oil price spikes exceeding $120- $150 per barrel as we import 88% oil and 91% LPG from the Gulf. Also, disruptions in the Strait of Hormuz led to major trade disruptions. Let’s take a look at the impact of the US-Israel-Iran war on India.
1. Fuel Price Spikes
India imports nearly 88% of its oil and 40% of its crude through the Strait of Hormuz. Disruptions have already caused oil prices to surge leading to higher petrol and diesel costs in the country. The country has witnessed immense shortage of fuel due to blockages in the Gulf region.
2. LPG Shortage
India is particularly vulnerable to Liquefied Petroleum Gas shortages as 65% of its cooking fuel is imported from the war affected region. Commercial kitchens and industries are already facing severe supply LPS limitations.
3. Trade Disruptions
Major maritime routes such as the Strait of Hormuz and the Bab el-Mandeb Strait are closed due to war disruptions. Approximately 400,000 tonnes of Indian Basmati rice are currently stuck in transit or at ports. Shipping and insurance premiums for vessels have suddenly rised making Indian exports less competitive to the world.
4. Limitations in Industrial Growth
Industries such as aviation, logistics,agriculture and paints are expected to face less margins due to rising input costs. This has largely affected global trade practices and India’s imports activities with the gulf.
Energy Crisis and Shortage of Gas Supply in India
India is facing a severe energy disruption triggered by the Iran and Israel war conflict which has effectively closed the Strait of Hormuz.This maritime chokepoint handles nearly 90% of India's LPG imports and a significant portion of its natural gas which has now shut down causing an energy crisis in India. Let’s take a look at the energy crisis and gas shortage in India.
1.Piped Natural Gas and Compressed Natural Gas
The government has guaranteed households and public transport 100% of their average supply as these are currently the first priority. Suppliers like Indraprastha Gas Limited have assured uninterrupted flow for home cooking keeping in mind the shortages of gas supplies.
2. Domestic Liquified Petroleum Gas
Production has been maximised by 28% in the last five days. The government maintains that the delivery cycle for households will remain roughly 2.5 days. Although a mandatory 25-day gap between two bookings has been enforced to prevent unnecessary hoarding for gas cylinders.
3. Commercial Liquified Petroleumn
The supply of commercial liquified petroleum gas is severely restricted. Restaurants and hotels are receiving only 20% of their typical supply leading to widespread closures and a shift to induction stoves or firewood.
Key Impacted Sectors Due to Energy Crisis in India
The Israel-US-Iran war has created an energy crisis in India due to which sectors such as hospitality, Industry, Agriculture have witnessed massive decline. In Mumbai, 20% of restaurants have shut down due to shortages of cooking gas and fertiliser plants are restricted to 70% of their gas supply. Let’s take a look at the key impacted sectors due to the energy crisis in India.
Hospitality
In cities like Mumbai, 20% of restaurants have already shut down due to lack of cooking gas supply. Eateries in Chennai have stopped serving fuel intensive dishes like dosa and parotta to conserve remaining gas stocks.
Manufacturing
Non-priority manufacturing units have seen gas allocations limited to 65-80%. Major hubs like the Morbi tile industry in Gujarat have seen over 170 factories shutdown operations. Around 15,000 MSMEs have been impacted due to disruption in supply of LPG and CNG.
Agriculture
Fertilizer plants are restricted to 70% of their gas supply which are raising concerns about future food inflation and crop yields. The government and farmers are exploring solar-powered pumps to replace diesel engines due to shortage of energy supply.
Conclusion
India is facing an energy crisis due to shortage of energy supply from the gulf. This is caused due to blockages in the Gulf maritime routes caused by the US-Isreal-Iran war. The US-Israel-Iran war Operation Roaring Lion refers to the large-scale military campaign which was launched on 28 February 2026 by Israel with coordination from the United States targeting missile systems, military infrastructure and strategic facilities in Iran amid escalating tensions over Tehran’s nuclear and regional security activities. These situations have drastically created LPG, CNG and PNG shortages in India causing many restaurants and manufacturing units to shut down.