Beyond oil, gas: Why Iran war could push up prices for many other industries in India

He added that India is among the most exposed. “Structurally import-dependent on West Asia for crude oil (50%+), LNG (50–55%), ethylene glycol, polymers, methanol, and fertilisers, India faces a compounding cost shock, worsened by the Rupee already at Rs 92 to the US Dollar. The market has not fully priced a prolonged disruption to shipping routes along the Strait of Hormuz,” Joshi added.

Textile to paint to diapers

A senior industry executive said there is impact across industries. “There are three types of impact. One is raw material supply, which is a shortage in imported raw materials, increase in shipping containers, etc. Second is market impact. After the European Union imposed restrictions like CBAM, a lot of industries started looking to West Asia as a market. That is getting impacted. And third is fuel and feedstock supplies which are related to natural gas and LPG supply,” the industry executive said.

The cost of Maleic Anhydride, which is used to produce unsaturated polyester resins (UPR) for fiberglass-reinforced plastics in automotive and construction industries, for instance, has gone up nearly 61% since the beginning of the crisis. Ethylene, used as a feedstock for producing plastics like polyethylene (PE), polyvinyl chloride (PVC), and polystyrene, has surged over 35%, and Acrylic Acid, a vital industrial chemical primarily used to produce adhesives, paints and coatings, hygiene products (diapers, sanitary pads), textiles, water treatment chemicals, and leather finishing, is up more than 30%.

The textile sector, for instance, is experiencing a complex chain of cost increases across its supply network. Textile processing costs have already risen in the short term due to higher energy prices. Processing activities such as dyeing, bleaching and finishing are energy-intensive, and higher fuel and power costs are beginning to push up operational expenses for manufacturers.

Industry players say the bigger impact is coming through petrochemical-linked inputs. Most textile chemicals and dyes rely on petrochemical raw materials, the prices of which have increased sharply. A founder of a major textile manufacturing plant in Gujarat said that several such inputs have seen price increases of close to 50% in recent weeks.

The effect is also visible in fibres such as polyester, one of the most widely used synthetic fibres in the textile industry. Polyester prices have already risen by around 15% he said, with a further possibility of further increases as it is derived from petrochemical feedstock.

Packaging materials have emerged as another pressure point. A significant portion of textile packaging relies on plastic-based materials, whose prices have doubled in the short term for many manufacturers. Industry sources say suppliers are increasingly demanding cash payments due to supply disruptions and price volatility, adding to working capital pressures for textile firms. Packaging typically counts for 5-7% of total costs.

The ripple effects have extended even to alternative packaging options. With plastic packaging becoming costlier, demand for paper-based packaging has also increased, leading to higher prices.

Small but essential garment components are also seeing cost escalation. Items such as zippers, labels and buttons — many of which are made using plastic or other petrochemical derivatives — have become more expensive as raw material prices rise.

In the mining sector, higher fuel prices have begun to push up production costs, according to a senior industry executive. A large share of mining operations relies heavily on fuel-powered equipment, from excavators and drilling machines to transport vehicles used to move ore. With fuel becoming more expensive, the cost of extraction and transportation has also increased, raising overall production expenses for mining companies.

Steel sector also hit by Iran war

Steelmakers are also facing cost pressures due to disruptions in the supply of coking coal, a key raw material used in blast furnace-based steel production. Shipment disruptions linked to tensions and uncertainty in global trade routes have led to a surge in coking coal prices, adding to the input costs for steel producers.

Notably, India’s imports of coking coal have been steadily rising, increasing from 51.20 million tonnes (mt) in 2020–21 to 57.58 mt in 2024–25. Around 95% of the steel sector’s coking coal requirement is met through imports, making the industry highly exposed to global supply disruptions.

A steel industry insider said prices of seaborne coking coal have risen by around 10% in some cases, largely due to delays in shipments. “A majority of our coking coal comes from Africa, and these shipments typically pass through the Gulf. Because of the ongoing conflict, there have been delays in shipments, which is pushing up prices,” the industry insider told The Indian Express.

The risk is also looming large for India’s glass manufacturing industry as the government plans to curtail the supply of natural gas to the sector. Industry leaders said glass manufacturing is a continuous-process industry, operating 24×7 throughout the year, where furnace operations cannot be paused without causing severe technical damage and significant financial losses.

“As a result, the risk becomes extremely high if there is any curtailment in natural gas supply. Even short disruptions can trigger unplanned furnace shutdowns,” an industry leader said, adding that the consequences of such shutdowns can be severe and often irreversible in the short term.