Home / Business and Economy / Gas Crisis Hits India's Auto Production
Gas Crisis Hits India's Auto Production
19 Mar
Summary
- Iran conflict disrupts gas supply for Indian auto manufacturing.
- Car demand is at a record high, leaving little inventory.
- Suppliers face production halts, impacting major automakers.
India's automotive industry is confronting potential production slowdowns and assembly-line disruptions as the ongoing Iran conflict severely impacts gas availability. This situation threatens growth in the world's third-largest car market, which is currently experiencing record-high demand with sales expected to surpass 4.5 million units by March 31.
Suppliers to major carmakers like Maruti Suzuki, Tata Motors, and Mahindra are reporting gas shortages, a critical component for high-heat manufacturing processes. While some suppliers can manage until the end of March, the strain is evident, with reports of factories operating below capacity. Small and medium manufacturers, more reliant on gas, are particularly vulnerable.
India, which imports 50% of its natural gas from the Middle East, is seeking alternative sources. However, the government prioritizes domestic gas for homes over factories. This energy crisis has led to S&P Global Mobility revising its 2026 light vehicle production growth forecast for India downwards, with potential for further revisions depending on conflict duration.
