As the war in West Asia between the United States, Israel, and Iran continues to disrupt global energy supply chains, the ripple effects have now reached India’s industrial heartland. The Gujarat government on March 10, 2026, announced a 50 per cent cut in gas supply to industries across the state, a move aimed at prioritising cooking gas for households amid mounting supply pressures. The decision has sent shockwaves through Gujarat’s manufacturing and hospitality sectors, with businesses warning of serious production disruptions and potential job losses.

What the Government Announced

Gujarat Energy Minister Rushikesh Patel made the announcement in Gandhinagar ahead of the assembly session, confirming that restrictions had been placed on industrial gas usage to prioritise domestic LPG consumption. “We have imposed a 50 per cent cut in the gas supply to industries. For fertiliser and milk (processing), there is a cut of about 40 per cent in gas supply,” the minister said. Patel assured residents that domestic LPG supply would remain uninterrupted, with the state and central governments coordinating closely to ensure households do not face any shortage of cooking gas cylinders.

The announcement followed guidelines from the central government, which has been managing energy allocations in response to the West Asia conflict. The Ministry of Petroleum and Natural Gas had previously directed oil refineries to ramp up LPG production for domestic use and halted the supply of commercial LPG cylinders to non-essential users.

Sectors Most Affected in Gujarat

The gas cut has hit Gujarat’s ceramics industry, one of the most energy-intensive sectors in the state, particularly hard. Around 100 ceramic manufacturing units in Morbi, which produces the majority of India’s ceramic tiles and sanitaryware, had already shut down due to gas supply disruptions before the formal announcement. With the 50 per cent cut now formalised, the rest of the sector is scrambling for alternatives. Similarly, restaurants, bakeries, and hotels in Ahmedabad, Surat, and other cities are reporting that the supply of commercial LPG cylinders has been completely halted, forcing many establishments to explore costlier alternatives like electric induction cooking or LPG cylinder hoarding at black-market prices.

In Rajkot, the ongoing war in West Asia has triggered both a 50 per cent supply cut and a tripling of gas prices at the industrial level, according to local industry representatives. The Shapar-Veraval industrial area, a hub for engineering and auto-component manufacturing, has been severely affected. MSMEs that cannot afford to stockpile or switch fuels at short notice face the prospect of shutting down temporarily.

The West Asia Connection: How the Iran War Hit India’s Gas Supply

India imports approximately 85-90 per cent of its LPG requirement, with the Gulf nations — particularly Saudi Arabia, Qatar, and the UAE — being the primary suppliers. The ongoing conflict involving Iran, Israel, and the United States has severely disrupted shipping through the Strait of Hormuz, a critical chokepoint through which a significant portion of the world’s LNG and LPG flows. With the US military claiming to have destroyed Iranian mine-laying vessels near the Strait, commercial tanker traffic has become extremely risky, causing major shipping companies to avoid the route. This supply disruption has created a sharp supply-demand imbalance for LPG in India, forcing the government to implement rationing measures.

Government’s Long-Term Strategy

Both the Gujarat government and the Union government have signalled that this is a temporary emergency measure while alternative supply routes and sources are being explored. India is in discussions with suppliers from the US, Russia, and Australia to diversify its LPG import portfolio. The Ministry of Petroleum has also directed domestic refineries to maximise propane and butane extraction from crude to boost indigenous LPG production. The government has simultaneously launched a crackdown on hoarding and black marketing, with the ministry issuing directives to states to take strict action against illegal stockpiling.

Conclusion

Gujarat’s 50 per cent industrial gas cut is a direct consequence of the geopolitical turmoil in West Asia and a stark reminder of how heavily India’s energy security is tied to the stability of that region. The immediate priority for the government is to protect household supply while the industrial sector bears the brunt. For businesses, the challenge is to adapt quickly — switching fuels, cutting production, or passing on higher costs to consumers. As the conflict in West Asia shows no signs of an early resolution, India needs to urgently accelerate its energy diversification strategy to prevent such vulnerabilities from becoming structural.