How Indian food business is feeling the heat of US-Iran war

Disrupted LPG supply has brought India's street staples, all flame-intensive cooking, to a halt. The food gig economy, 56% of the sector, which feeds & employs millions, is showing its deep vulnerability

Over the past couple of days, rather than ‘offer of the day’ messages or social media posts, neighbourhood food stalls and diners are sharing their regrets at not being able to serve their best sellers. Restaurants are quietly removing popular dishes from menus. Cloud kitchens are informing customers that certain items are temporarily unavailable. Delivery apps show favourite kiosks and outlets pausing signature offerings that require cooking on gas stoves. On the streets, familiar evening carts serving hot food are simply not appearing. Papdi and golgappa vendor looking for survival is not bemused when asked to ‘look for baked variant’ suggestions.

At the heart of this disruption is a tightening supply of commercial LPG cylinders, fuel that powers overwhelming majority of India’s restaurant kitchens and street food stalls. What may appear to be a supply chain issue is in reality a stark reminder of how fragile one of India’s most important employment and consumption engines can be when a single critical input is disrupted.

Reports from multiple cities suggest that restaurants, hostels, street food stalls, canteens and catering services have already begun cutting menus, shortening operating hours and in some cases, temporarily shutting operations because commercial LPG deliveries have slowed or stopped. Popular dishes such as dosa, bhatura, poori, tikki, tawa and wok preparations and full hot meals have disappeared from menus in several establishments because there simply isn’t enough gas to cook them.

The supply squeeze has been linked to global energy disruptions triggered by the conflict in West Asia, which has strained LPG logistics and supply chains that India depends upon heavily. A significant portion of India’s LPG requirements comes from imports, many of which pass through the Strait of Hormuz, making the country vulnerable to geopolitical disruptions.

The government has understandably prioritised household LPG consumption to ensure that domestic kitchens continue to function. But that policy decision has created a cascading problem for commercial kitchens that depend entirely on the same fuel.

The restaurant industry bodies such have already written to the petroleum ministry seeking urgent intervention and clarity on commercial LPG supply. Top restaurateurs and industry observers across the country have been warning that if the situation persists for even a few more days, a significant portion of restaurants could be forced to temporarily shut operations. In fact, industry estimates suggest that as many as 50–60 percent of restaurants could face closure if commercial LPG supply is not restored quickly.

The numbers behind the sector show why this situation deserves urgent attention. According to the National Restaurant Association of India (NRAI) India Food Services Report, India’s food services market was valued at ₹5,69,487 crore in 2024 and is projected to grow to ₹7,76,511 crore by 2028. This makes it one of the country’s most significant consumption sectors.

But the most revealing statistic is the sector’s composition. Of the total market size in 2024, about ₹2,49,694 crore comes from the organised segment, which includes branded restaurants, chains and formal dining establishments. The larger share, ₹3,19,793 crore, or 56 percent, belongs to the unorganised sector.

That unorganised sector is where the real vulnerability lies.

India’s informal food economy comprising street vendors, hawkers, small stalls, roadside carts and neighbourhood kitchens depends almost entirely on LPG cylinders. These vendors typically operate from small carts or makeshift setups where storing spare cylinders is not possible. Many rely on frequent deliveries to keep their stove or wok running through the day.

If the cylinder runs out and replacement supply does not arrive, business stops immediately. They operate in a highly price sensitive environment with thinnest of margins. Raising their price or absorbing the rising cost are both suicidal for their business.

This is why the impact of LPG shortage is already visible on the streets before it becomes visible in large restaurants. Vendors selling tikkis, chaat, samosa, noodles, fried rice, fried chicken or hot gulab jamun are unable to operate because they cannot secure cooking gas. The absence of those stalls means far more than just fewer food options for customers. It means lost daily income for thousands of vendors and daily wage workers and helpers who are paid only when the stall operates.

India’s street food culture is built on flame-based cooking. The sizzling tawa for besan chilla, uthapam or parantha, the bubbling oil for pooris, samosa, bhaturas and friend fish or chicken, the dosa griddle that runs through the evening rush, tandoors for bread or chicken and paneer tikka preparations, and the intense heat of Chinese-style woks tossing noodles, fried rice or fried chilli chicken, all depend on LPG. When gas supply tightens, these very foods, the staples of our street, are the first casualties.

Even within the organised restaurant sector, the crisis is forcing unusual operational decisions. Some establishments are introducing ‘crisis menus’ with fewer dishes that require less cooking time, while others are reducing operating hours.

This moment must make everyone also acknowledge the way the food services sector is often underestimated in economic conversations. India frequently celebrates billion-dollar technology companies as symbols of economic growth. Yet many such companies employ relatively small teams compared with traditional service sectors. A single restaurant, even a modest one, can directly and indirectly employ dozens of people. Kitchen staff, servers, cleaners, delivery workers, suppliers, vendors and logistics providers all depend on that one establishment. The gig economy that everyone talks about is almost entirely run by restaurant industry. Across the country, restaurants, street food stalls and catering services together sustain millions of livelihoods.

In an era where automation and artificial intelligence are rapidly reshaping job markets, hospitality remains one of the sectors most resistant to full automation. Cooking, serving, cleaning, managing kitchens and delivering food are fundamentally human-driven services. These are precisely the kinds of jobs that many economists believe will continue to exist even as AI reshapes other industries.

It needs to be stressed, the food services sector is quietly helping solve one of the most pressing challenges our government faces: employment.

And yet, when crises like the current LPG disruption occur, the sector often finds itself struggling for recognition and support.

The idea given by many armchair observers that restaurants can simply switch to electric hot plates or induction cooktops shows their lack of awareness of the reality and scale of the industry. Those posting their views of overnight adoption of new cooking methods while sipping machine made coffee totally miss out on basic understanding of how lakhs of tea stalls will disappear without their gad supply. High-heat cooking techniques such as wok tossing, deep frying, tandoor baking and large-scale Indian cooking depend on flame intensity that small electric devices cannot easily replicate. For street vendors, such transitions are not even feasible.

A ₹5.7 lakh crore sector that feeds millions and employs even more remains deeply dependent on a single fuel supply chain. Recognising the food services industry as an essential economic engine and ensuring that its operational needs are protected during supply disruptions should therefore be a policy priority.

Because when the flame in India’s kitchens weakens, it is not just restaurants that suffer. It is an entire employment and revenue generating ecosystem, a vast informal economy and a daily food culture that millions depend upon feels the heat.