Kamal Ghorui
MUMBAI/CHENNAI: Shockwaves from US and Israeli strikes on Iran may seem distant from India’s shores, but for Indian industry, the impact is already hitting home. Gas curbs, production cuts, export delays, and constantly rising operating costs are rippling through fertiliser plants, ceramic kilns, sanitary ware units, textile mills, and tyre factories. In Gujarat, Triveni Iron and Steel Industries is bracing for a 50% production cut, as its heavy reliance on West Asian liquefied natural gas (LNG) leaves it exposed to supply disruptions. Jindal Stainless expects delays in steel shipments as the conflict snarls trade routes and logistics. Mangalore Refinery and Petrochemicals (MRPL) has temporarily suspended fuel exports while struggling to secure crude oil cargoes amid rising uncertainty. Industry executives warn that tensions in major oiland gas-producing regions can quickly disrupt global energy supply chains. MS Banani, joint managing director of Axiom Gas Engineering, recalls that similar disruptions during the Iraq war drove crude prices to nearly $140 a barrel, triggering sharp increases in LNG, LPG, petrol, and diesel. The current conflict involving Iran, Israel, and the US is again placing pressure on Gulf supply routes, creating procurement challenges, delays, and rising costs for Indian importers, Banani said.
To manage the crisis, India has invoked emergency powers to prioritise LPG supplies for households. Fertiliser plants, tea processors, and other priority sectors will receive LNG first. Energy giants like Reliance Industries (RIL) and ONGC have been ordered to maximise LPG output while restricting its use for petrochemical manufacturing. RIL said it is ramping up LPG production at its Jamnagar refining and petrochemical complexes to stabilise domestic supplies. Natural gas from its KG-D6 basin will be diverted to priority sectors, in line with government directives and national energy priorities, it added. V K Vijayakumar, chief investment strategist at Geojit Investments, said that while the situation is manageable for now, prolonged disruptions could lead to physical shortages affecting transport, hospitality, and industrial sectors. LPG supplies are being prioritised for households, but if Brent crude remains above $90 a barrel, businesses could face mounting cost pressures. Tyre manufacturers are also under strain, as crude-oil derivatives like synthetic rubber and carbon black account for nearly 70% of their raw materials. Erratic LPG supply is already affecting forging companies. “We are seeing some shortages in LPG, which is essential for running our operations, as private players are struggling with supplies,” said the CEO of a forging manufacturer. With 80–85% of LPG directed to domestic households, commercial and industrial users have a limited share, leaving them vulnerable during disruptions. Apparel exporters, already battered by months of punitive US tariffs, are grappling with rising costs. In Tiruppur, more than 450 small and medium dyeing units rely on gas-fired boilers and are now struggling to maintain production amid spiking raw material prices, including caustic soda, acetic acid, sodium sulphate, and ferroxide. Gandhi Rajan, head of the dyeing units’ owners’ association, said most units typically have gas reserves for about 15 days, beyond which shutdowns become inevitable.
