War scars begin to show on India Inc

With the Iran war in its third week, the economic costs are beginning to show across India Inc. From export disruption to supply-chain snags and tightening gas supplies, the ripple effects are spreading across industrial sectors.

- DEEPAK PATEL, SHINE JACOB, ANJALI SINGH, SANJEEB MUKHERJEE, SHARLEEN D'SOUZA & ISHITA AYAN DUTT

On the production side, industry is grappling with orders issued on March 5 and March 9 by the Ministry of Petroleum and Natural Gas (MoPNG) directing refineries and petrochemical complexes to maximise liquefied petroleum gas (LPG) output and prioritise supplies to households and essential services, pushing commercial and industrial users lower in the supply order — a move threatening to disrupt operations across sectors.

Fuel supply worries weigh

India’s automobile industry, which had been riding a wave of strong demand after last year’s goods and services tax rate rationalisation, is now bracing for disruption, executives said.

Automakers and component manufacturers are worried about the availability of key industrial fuels, such as LPG, piped natural gas (PNG) and propane, which are used across automobile and auto-component factories for forging, casting, heat treatment, welding and paint curing.

On March 9, the Society of Indian Automobile Manufacturers (Siam) wrote to MoPNG, seeking clarity on the availability and supply visibility of LPG, PNG and propane so that vehicle manufacturers could plan production schedules and minimise potential disruptions.

In a separate letter to the Ministry of Heavy Industries, the Automotive Component Manufacturers Association of India (ACMA) warned that emerging constraints in LPG and PNG availability could affect production schedules, particularly for MSME units in the forging and foundry segments, which have limited flexibility to quickly shift to alternative fuels.

In the metals sector, early signs of disruption are already beginning to emerge.