From Global Conflict to Your Kitchen: How the US-Iran War is Hitting Indian Wallets
First came the Covid pandemic, then the Russia-Ukraine war, followed by Trump's tariffs, and now the world is grappling with a raging crisis in the Middle East. Each event, though separated by time and circumstance, has brought its impact closer to home. In the initial week of intense conflict with Iran, the United States expended a staggering $11.3 billion. However, this isn't merely about abstract geopolitical maneuvers involving America, Iran, or Israel—it's about you and the financial toll you may have to bear.
But what connection does a war thousands of kilometers away have with your monthly grocery expenses, your child's overseas education, or your personal savings? The influence runs far deeper than many realize.
The Immediate Shock: LPG Prices Surge
The most direct effect is being felt in Indian kitchens, even before stoves are ignited. With approximately 90% of India's LPG imports traversing the Strait of Hormuz, supply disruptions have triggered panic buying and reports of black marketing. Earlier this month, LPG rates underwent a sharp revision. As of March 10, 2026, a domestic 14.2 kg cylinder now costs Rs 913, up from Rs 853 on March 1. Commercial cylinder prices have escalated even more dramatically, rising from Rs 1,768.50 to Rs 1,884.50, marking a Rs 115 increase.
Rishi Shah, Partner and Economic Advisory Services Leader at Grant Thornton Bharat, informed TOI that households should prepare for effective fuel and cooking cost hikes of 15-20% over the next quarter if disturbances persist. He emphasized that this is fundamentally driven by global supply disruptions, factors beyond governmental control.
Cooking Oil and Grocery Strains
Your grocery bill is likely to feel heavier due to rising cooking oil prices. According to a TOI report, sunflower oil has increased by about Rs 15 per liter, while mustard oil costs Rs 10 more. Blended oils have seen a jump from roughly Rs 880 to Rs 1,000 for a five-liter can online, subtly adding pressure to household budgets.
Nilesh Veera, director of the Mumbai APMC grain market, told TOI that wholesale rates rose by Rs 5 per liter in recent days before slightly dropping. He noted that the current hike of Rs 2-3 per liter proportionately raises retail prices. India's heavy import dependence exacerbates this issue, with over 56% of edible oil needs met through imports in 2023–24.
The supply chain squeeze worsens the situation. Russia and Ukraine collectively account for 70–90% of India's sunflower oil imports. Disruptions in Black Sea routes, coupled with tensions around the Red Sea and Suez Canal, have tightened supplies and driven up freight costs. The Solvent Extractors’ Association (SEA) highlighted that risks of disrupted sunflower oil shipments from Russia and Eastern Europe, along with higher freight costs for palm oil, are fueling price hikes, forcing traders and consumers to closely monitor supply chain risks.
Pulses, Fruits, and Dry Fruits Under Pressure
Pulses may also face upward pressure. India imports around 5–6 million tonnes annually, including tur, urad, and lentils from Myanmar, Canada, and parts of Africa. While supply lines remain largely intact, rising logistics costs—such as higher freight charges, war-risk premiums, and increased insurance—are pushing up landed prices, likely trickling down to retail and adding to food inflation.
Bimal Kothari, chairman of the India Pulses and Grains Association (IPGA), explained to ET that some cargo passes through the Red Sea, so disruptions there could create import constraints. War risk premiums have increased, elevating insurance costs for container shipments, though much of India's pulse imports are unlikely to be directly affected.
Your fruit basket could be next. India relies on competitively priced apple imports from Iran, which constituted nearly 23% of imports in 2024, along with significant shares in dry fruits like pistachios (around 60%) and almonds (about 39%). Anjeer, pista, saffron, and apricots will also see impacts. Traders are already turning cautious due to uncertainty around shipping routes and trade flows.
Harish Chauhan, Convener of Himachal Pradesh’s Sanyukt Kissan Manch, told ET that traders are factoring this uncertainty into future strategies. Any prolonged disruption reducing Iranian apple imports could force recalibration of sourcing strategies, reshaping India's apple market dynamics.
Sweets and Daily Essentials Get Pricier
Your sweets might become more expensive as dry fruit prices surge, affecting mithai makers and bulk buyers. Vicky Jaisinghani of A-1 Sweets in Ulhasnagar noted that imported Pishori pista has jumped from Rs 2,600 to Rs 3,400 per kg, while Iranian pista has risen from Rs 1,650 to Rs 2,400. Despite spikes, quality cannot be compromised as premium ingredients are essential for taste.
Mayur Shah of Pravinchandra & Co. in Masjid Bunder stated they have not hiked rates yet but may do so once existing stocks are depleted.
Daily used items might see hikes due to petrochemical inputs widely used in products like soaps, shampoos, creams, hair oils, and packaging. These derivatives account for over a quarter of FMCG companies' input costs. Company executives report that prices of key crude derivatives, including plastics, resins, and polymers like polyethylene and polypropylene used in packaging, have surged by up to 25% in the past month. A similar spike in polyester staple fiber adds to sector cost pressures.
Home Makeovers and Electronics Cost More
Painting your house could soon cost more as soaring crude prices push up paint costs. Decorative paints may become 9–10% more expensive, according to ET. Berger Paints is set to raise prices by around 5% on average for solvent-based products, waterproofing emulsions, and industrial paints from March 25 due to rising input costs.
CEO Abhijit Roy told ET that the company is closely monitoring raw material prices, which fluctuate daily, hinting that another round of hikes may follow if pressures persist.
Planning to buy a new TV or AC? Brace for higher bills. Consumer electronics and appliances are expected to become 5–6% costlier due to heavy reliance on plastic components, whose prices are rising sharply.
Kamal Nandi of Godrej Enterprises told ET they will increase prices from April, possibly by 5–6%, noting that input costs have surged significantly over the past month. Plastic suppliers are repeatedly hiking prices and hesitating to commit to long-term contracts, adding uncertainty for manufacturers and consumers.
Commuting and Travel Expenses Escalate
India buys nearly 40% of its crude oil needs from the Middle East, though discounted Russian crude has offered some cushion. Global prices are surging, with Brent crude crossing $100 per barrel. Iran has warned prices could spike to $200 if conflict escalates, pushing up international prices of petrol, diesel, and aviation turbine fuel (ATF).
Domestic fuel prices have remained unchanged for now, meaning state-run oil companies are absorbing losses. In the near term, the burden is likely shared between oil marketing companies and the government.
Air travel is getting costlier as airlines pass on rising ATF prices. IndiGo has introduced a fuel surcharge ranging from Rs 425 to Rs 2,300 on domestic and international flights. Air India and Air India Express announced a Rs 399 surcharge on domestic tickets starting March 12. Akasa Air also announced surcharges from Rs 199 to Rs 1,300 on domestic and international tickets, citing significant ATF price increases driven by Middle East geopolitical developments.
Other carriers signal similar moves. SpiceJet warned that fare hikes may be unavoidable if fuel prices remain high, with founder Ajay Singh stating airlines will have no choice but to increase fares and urging the government to cut jet fuel taxes.
Car Purchases and Education Costs Rise
Car purchases may become more expensive, with automakers preparing for price hikes of 2–3%. Luxury brands Mercedes-Benz and Audi have announced increases of around 2% from April 1, while mass-market carmakers are finalizing revisions. Industry leaders warn these hikes could dent recent sales gains driven by GST cuts but say they have little choice as volatile supply chains push costs higher.
Planning to study abroad? You may need a bigger budget. The escalating Middle East conflict has weakened the rupee to a record low of around 93.12 against the US dollar. A weaker currency makes tuition fees, accommodation, and daily expenses more expensive for Indian students paying in foreign currency, adding pressure on family finances.
As Middle East tensions continue, families are becoming cautious about sending students to the region. While cancellations remain limited, some consider deferrals or other destinations. Alternatives are getting costlier as the rupee weakens. For instance, a year at Harvard has risen from about Rs 53 lakh in 2021 to over Rs 78 lakh, according to a TOI analysis.
Portfolio Losses and Financial Uncertainty
The recent selloff triggered by the US-Iran conflict has wiped out nearly Rs 34 lakh crore in investor wealth within weeks, shrinking the value of stocks, mutual funds, and retirement savings. For many families, this means portfolios are suddenly worth less, forcing rethinking of spending, delays in big purchases, or postponement of plans like buying a home or car.
Experts say the longer-term outlook for the Indian stock market remains relatively stable. Compared to other global economies, New Delhi's exposure to oil shocks is somewhat cushioned as energy imports form a smaller share of overall consumption. Lower dependence on foreign investor flows has also helped limit volatility.
According to Moody's Analytics, India has seen only moderate corrections in line with typical market cycles, suggesting that despite current turbulence, the broader growth trajectory remains intact. The report noted that although India and China are large net oil importers from Gulf Cooperation Council economies in absolute terms, energy imports account for a smaller share of domestic consumption, limiting vulnerability to oil price shocks. Foreign investor participation in equity markets is lower, and in China's case, capital controls further limit volatility, shielding their equity markets from sharper declines.
Conclusion: Navigating Financial Turbulence
The escalating US-Iran conflict is poised to hit Indian households, driving up costs across almost every aspect of daily life. In the kitchen, LPG prices have risen, while edible oils, pulses, lentils, and imported dry fruits could climb due to disrupted supply chains and higher logistics costs. Fuel inflation adds to the burden, with crude crossing $100 a barrel, prompting surges in petrol, diesel, and aviation turbine fuel, further pushing transportation costs.
On Friday, state-run oil marketing companies increased the price of their premium-grade power petrol by over Rs 2 per liter, while keeping regular petrol and diesel prices unchanged.
For households, this turbulence serves as a stark reminder of how quickly global shocks can ripple through personal finances. While markets may stabilize over time, the immediate hit to savings and investments can influence spending decisions, delay financial goals, and heighten uncertainty. If volatility persists, families may continue adopting a more cautious approach, cutting back on discretionary expenses and prioritizing financial security until clearer signals of stability emerge.
