India asks auto industry to optimise production as Iran war hurts energy supplies

2026-03-26 - 16:31

India has asked automakers and parts suppliers to tighten production schedules to conserve fuel amid fears of shortages ​caused by disrupted oil and gas imports from the Gulf ‌due to the Iran war, a government memo seen by Reuters shows. The heavy industries ministry has also urged companies to shift factory operations from oil-based fuels to ​electricity and to use recycled aluminium or alternative materials as shortages ​and costs rise, according to the March 25 advisory. For India, ⁠one of the world’s largest oil and gas importers, the advisory ​underscores the government’s mounting concern over the conflict and its disruption to ​energy flows, supply chains and availability of raw materials. India’s ministry of heavy industries did not immediately respond to a request for comment. The government has already prioritised use of ​gas for households over industries, which get only about 80% of their ​average needs. Some parts suppliers to India’s leading carmakers like Maruti Suzuki, Tata Motors and ‌Mahindra are already reporting a shortage of gas to power operations at a time when vehicle sales are booming. The ministry wants the sector to do more. “Wherever technically feasible, a transition from oil-based fuels to electricity may be considered. ​Further, production schedules ​may be optimised ⁠to minimise idle and standby fuel consumption,” the ministry said in its note. The government wants companies to use ​recycled aluminium where possible and explore the use of ​alternative materials ⁠for packaging and other non-critical applications to reduce “demand pressure” amid shortages which are already affecting beer makers. “I don’t know how much we can change in the ⁠factory, ​but the takeaway is that this war ​is going to go on for a long time and we should be prepared,” said an ​executive at an Indian carmaker.