From gas to bottled water, the Mideast conflict weighs heaviest on India's poorest
The war that Israel and the United States launched against Iran is resulting in a shortage of gas supplies in India, higher food prices, and even rising costs for drinking water. This situation could get worse if fertiliser shortages are added; as a result, India has asked China for help. Once again, Washington is bringing the two Asian giants closer together.
New Delhi (AsiaNews) – The escalation of the conflict between the United States, Israel, and Iran is triggering a global energy crisis that is already making its effects felt on the streets of India. For millions of ordinary Indians, the result is a drastic shortage of cooking gas and a sudden increase in the cost of essential daily goods.
India imports approximately 80 per cent of its liquefied natural gas (LNG) and between 60 and 65 per cent of its liquefied petroleum gas (LPG), a mixture of propane and butane, which is liquefied for easy storage and transport in cylinders or tanks used for cooking.
With the Strait of Hormuz paralysed, supplies have slowed, causing panic among families and small vendors. To avoid shortages for home use and possible protests among the middle class, the Indian government has decided to prioritise the distribution of cylinders for household use.
As a result, supplies have been cut to businesses such as dhabas – roadside and urban eateries that provide a quick bite 24/7 – and tiffin services that deliver cheap meals to migrant workers and the many urban poor.
In major cities like Mumbai and New Delhi, the official price of a 19-kilo commercial cylinder, which normally costs 1,800–1,900 rupees (US$ 19-20), jumped to 2,800 rupees (US$ 30) on the black market. In some cities, the difference is even greater, with black-market prices exceeding 3,500–4,500 rupees (US$ 38-48).
This has impacted many small restaurants and kiosks, forced to raise the prices of basic items like tea and samosas by 5–10 rupees, or drastically reduce their menus, limiting themselves to a few essentials, like rice and pickles.
This situation is particularly hard on observant Muslim families during Ramadan, the holy month when traditional iftar dishes are prepared, which are increasingly expensive and even difficult to make.
In several places, community kitchens offering low-cost meals have had to reduce portions or suspend service because of lack of fuel.
Funerals in India are also at a standstill. In cities like Pune and Kozhikode, public crematoria have run out of gas supplies, forcing many families to return to wood-fired funeral pyres, a more expensive and polluting solution.
Rising oil prices are also driving up the cost of polymers used to produce plastic bottles, as well as caps, labels, and cardboard packaging.
According to the Federation of All India Packaged Drinking Water Manufacturers' Association, approximately 2,000 small producers have already increased their prices to distributors by about 1 rupee per bottle (about US$ 0,01), a 5 per cent increase, but further rises could follow in the coming days.
In India, a one-litre bottle generally costs less than 20 rupees, a particularly sensitive issue in a country of 1.4 billion people, where, according to several studies, approximately 70 per cent of groundwater is contaminated, and where bottled drinking water is therefore a daily necessity for millions of people.
Meanwhile, the Indian rupee has fallen to a record low of 92.35 against the US dollar. Last year, the Indian currency had already recorded the worst performance among major Asian currencies, but the renewed surge in energy prices linked to the war is further exacerbating the pressure on the currency: each barrel of imported oil is now even more expensive, further fuelling inflation.
The situation is particularly complicated for the approximately 9.1 million Indian migrant workers who live in the Gulf countries, whose remittances represent about 38 per cent of total foreign earnings, some US$ 50 billion a year, a pillar on which the country’s economic stability rests.
If the war were to drag on, the loss of jobs for these migrants and the potential need to evacuate millions of people could not only turn into a logistical and financial nightmare, but also seriously jeopardise India's economic security.
Just as US tariff policy had pushed New Delhi unwittingly closer to Beijing, this war could further benefit China after India recently appealed to its neighbour for fertiliser, an essential commodity for Asian countries that transits through the Strait of Hormuz.
Without gas supplies, Indian plants that produce fertiliser are at risk of shutting down. Urea production – a key element in the country's vast agricultural sector, which employs approximately 30 per cent of its workforce – is particularly threatened.
With the monsoon rains and planting season expected in June, New Delhi asked Beijing to ease restrictions on urea exports to India to avoid causing widespread food insecurity.
This week, the Indian government also decided to relax some rules on foreign investment known as “Press Note 3”, which it introduced after border clashes with China in 2020 to limit Chinese economic influence.
The new guidelines now allow companies with less than 10 per cent Chinese ownership to invest in India without prior government approval.
The goal is to leverage Chinese capital and technology to strengthen India's manufacturing sector at a time of significant global instability. Once more, the United States is inadvertently fostering an economic alliance between the two Asian giants.
(Nirmala Carvalho contributed to this article)
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