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West Asia Tensions: Fuel Crunch Hits India’s Auto Industry

The Gulf war has the potential to squeeze India's auto industry from every direction — energy supplies, raw materials, logistics and consumer demand.

By Shahkar Abidi, Darshan Nakhwa and Prerna Lidhoo

26 Mar 2026

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West Asia Tensions: Fuel Crunch Hits India’s Auto Industry

A crisis is brewing in Pune, the automotive manufacturing hub. At major Tier 1 plants like CIE Automotive, engineers are ditching liquefied petroleum gas for diesel, a desperate pivot aimed at keeping the lines moving. This is not a technical glitch; it is the first sign of a systemic breakdown triggered by the outbreak of war between Iran and the US-Israeli alliance earlier this month.

The pressure is most acute at the base of the industry's rigid hierarchy: Tier 3 and Tier 4 component suppliers across automotive hubs including Delhi-NCR, Chennai, Bengaluru, and Aurangabad. The smaller machine shops and ...

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