India and neighbours weather the Hormuz blockade

Auto-rickshaw driver Vishal Singh, while skilfully manoeuvring  his three-wheeler through the congested lanes of Kolkata,  informs his passengers of an imminent fare hike. ‘Two countries  are fighting, and we are getting crushed,’ he says, referring to the  war between Iran and the United States. The spike in compressed  natural gas (CNG) prices has hit him hard, leaving him with  shrinking daily earnings after fuel and rental costs. After  spending most of his income on fuel and vehicle rent, very little  is left to take home. 

For many in South Asia, what was once distant geopolitics is now  shaping everyday life. The ongoing war in West Asia has begun to  directly affect the daily lives of ordinary people, not only in India  but across its immediate neighbourhood. The language of global  

conflict, once confined to television debates, has now entered  everyday conversations in markets, buses and homes. 

India depends heavily on imported energy. Nearly half its oil  supply and a significant portion of its gas imports comes from  the Gulf, making it especially vulnerable to disruptions. Any  restriction in tanker movement or increase in freight and  insurance costs is quickly reflected in domestic fuel prices. 

Consumers queue outside an LPG distribution centre in  India as supply disruptions and panic buying expose the  region’s dependence on Gulf energy imports. Photo: Times of India 

What has affected Indian households most is the disruption in  the supply of cooking gas cylinders. Most Indian households rely  on LPG for cooking, much of which is sourced from the Gulf.  India is one of the world’s largest importers of LPG, making it  particularly exposed to global supply shocks. The initial phase of  the crisis saw long queues outside LPG distribution centres,  panic buying and hoarding. In several cities, consumers reported  delays in receiving refills, while smaller distributors struggled to  meet demand. In response, the government prioritised  household supply over commercial consumption, attempting to  stabilise availability. 

While domestic consumers continue to receive subsidised  cylinders, the burden has shifted elsewhere. Commercial users –  restaurants, food vendors and small businesses – have been  forced to absorb the full impact of rising prices. The burden has  been felt most sharply by small businesses. Take, for instance, a  Kolkata biryani outlet. Its owner, Mohd Ahteram, admits that  the cost of commercial LPG cylinders has become prohibitively  expensive. ‘Commercial LPG is too expensive now,’ he says,  adding that he has switched to coal to keep his business  running. Unlike larger restaurants, small establishments cannot  easily pass on higher costs to customers. ‘If we raise prices,  customers will stop coming,’ he explains. 

A restaurant in India temporarily switches to firewood for cooking after shortages and rising prices of cooking gas disrupted operations during the regional fuel crisis linked to the Hormuz blockade. Photo: Nirmal Harindran 

Restaurants and small eateries across India have reduced menus,  cutting fuel-intensive dishes, while others have shifted to  alternative cooking methods such as tandoor ovens. Some have  also reduced portion sizes or limited operating hours to manage  costs. Even popular food delivery platforms are promoting  ‘low-fuel’ or ready-to-eat options as cooking patterns change.

Rising fuel costs have had a cascading effect across the economy.  Transport fares have increased, pushing up the cost of goods and  essential commodities such as vegetables, milk and groceries.  Wholesale traders report that higher freight charges have  directly fed into retail prices. For households already grappling  with inflation, this has significantly increased the cost of living. 

The government response has been shaped by both economic  and political considerations. Following the conclusion of state  elections, the government announced austerity measures aimed  at reducing fuel consumption. Citizens were urged to rely more  on public transport, adopt remote working where possible and  cut down on non-essential consumption. There were also  appeals to reduce discretionary spending and conserve energy at  the household level. Efforts to curb non-essential imports and  conserve foreign exchange reserves highlight the scale of the  challenge. 

For ordinary citizens the crisis is about survival. Higher fuel  costs have pushed up transport fares and the price of goods,  creating a cascading effect across urban and rural economies. In  several cities, there are reports of workers cutting back expenses  or migrant workers returning to their home villages as living  costs rise. 

The ripple effects extend beyond India. In neighbouring  Bangladesh, the crisis has had a similarly disruptive impact.  Rising fuel prices have increased transport costs and affected  daily life, particularly for small traders, street vendors and  low-income households. In Dhaka, residents report fewer buses,  shorter market hours and rising prices for basic goods. Public  transport operators have reduced services as fuel costs rise,  adding to commuter difficulties. 

Commuters and traders in Dhaka face transport disruptions and reduced market activity as Bangladesh  imposes energy-saving measures during the regional fuel crisis. Photo: Mehedi Hasan 

Electricity shortages have added to the strain. The authorities  have introduced rationing measures, including early closure of  markets and restrictions on energy use. While such measures  aim to manage limited supplies, they have also affected  livelihoods and economic activity. Businesses that depend on  evening trade have been particularly affected. 

Nepal is heavily dependent on imported fuel, and rising prices  have pushed up both transport and food costs. The government  has introduced measures to reduce consumption, including  shorter working weeks and reduced operating hours. While  these steps help conserve fuel, they also slow economic activity.  Construction and infrastructure projects have been affected by  higher diesel costs. The impact is felt in everyday expenses.  Higher transport costs have translated into increased prices for  essential goods, placing additional strain on household budgets.  The construction sector has also been affected, with rising diesel  costs making projects more expensive and difficult to sustain.  Small businesses and daily wage workers have been among the  most affected.

Bhutan, too, relies almost entirely on imported fuel, making it  particularly vulnerable to external shocks. Fuel prices have risen  sharply, prompting the government to introduce energy-saving  measures and encourage citizens to reduce non-essential travel.  Public messaging has focused on conservation and reducing  dependence on imported energy. 

Rising fuel prices in Nepal and Bhutan have increased transport costs and disrupted daily life across the Himalayan region. Photo: Reuters 

Across South Asia, the pattern is strikingly similar. A distant  conflict has triggered a chain reaction through energy markets,  affecting transport, food prices and livelihoods. The crisis has  highlighted the fragility of existing systems. South Asian  economies remain deeply tied to global supply chains, and  disruptions in one part of the world can quickly have  far-reaching consequences. For millions of people, this has  meant higher costs, reduced incomes and increased uncertainty. 

There have also been shifts in behaviour. Governments and  citizens alike are placing greater emphasis on energy  conservation, the use of public transport and more efficient  consumption patterns. In some cases, the crisis has accelerated a  gradual shift towards alternative energy sources and more  sustainable practices. 

Yet these adjustments are unlikely to offset the immediate  impact. The economic and social effects of the crisis continue to  unfold, with the most vulnerable populations bearing the brunt  of the disruption. For them, the war is not a distant geopolitical  event but a daily struggle to manage rising costs and shrinking  resources. The war has brought distant geopolitics into everyday  life, raising costs and exposing the region’s dependence on  fragile global energy routes. What began as a conflict thousands  of kilometres away has become a defining economic challenge  for millions, shaping how they travel, cook, work and live.