Restaurant India News: India’s Rs 335-Billion F&B Industry Faces Disruption Amid LPG Shortage

India’s food delivery platforms and restaurant operators witnessed a sharp decline in stock market performance after supply disruptions linked to the escalating conflict involving Iran triggered a shortage of LPG, a key fuel used across commercial kitchens. The development has raised concerns across India’s Rs 335-billion food and beverage sector as supply constraints begin affecting restaurant operations.

Shares of Eternal Ltd., the parent company of Zomato, declined by as much as 4.8 percent in trading in Mumbai, while Swiggy Ltd. touched a record low as investors factored in the possibility of lower order volumes. The impact extended to listed restaurant operators such as Jubilant FoodWorks Ltd., which operates Domino’s Pizza in India, as restaurants face operational pressure due to reduced availability of LPG for cooking.

The shortage is linked to disruptions in energy supply routes in West Asia, which accounts for more than half of India’s LPG imports. Shipping activity in the region has been affected by the closure of key maritime routes, including the Strait of Hormuz, following escalating tensions involving Iran and the United States alongside Israel.

The closure of these routes has prevented LPG tankers from passing through the corridor, disrupting deliveries to India. Hospitality industry groups in major urban centres such as Mumbai, Bengaluru, and Chennai have warned that up to 50 percent of restaurants in these cities could be forced to temporarily shut down if supplies do not resume soon. Some restaurants have already reduced operating hours and removed dishes that require longer cooking times to conserve gas reserves.

“Reduced menus, limited cooking hours, or temporarily shut kitchens at some restaurants may limit order availability on platforms, leading to temporary moderation in fourth-quarter food delivery order volumes,” analysts at Motilal Oswal including Abhishek Pathak wrote in a research note.

While restaurant operators and delivery platforms are facing operational challenges, the LPG shortage has led to increased demand for electric cooking appliances. Companies such as TTK Prestige Ltd. and Stove Kraft Ltd. have seen their shares rise amid higher sales of induction cooktops and pressure cookers.

TTK Prestige shares climbed by as much as 15 percent on Thursday, taking its gains over the past three days to nearly 30 percent. Stove Kraft also rose by as much as 12 percent as households and small food businesses increased purchases of electric cooking appliances.

Quick commerce platforms including Blinkit and Zepto have reported strong demand for induction stoves, with several models selling out within minutes as consumers and small eateries seek alternatives to LPG-dependent cooking.

To manage the shortage, the central government has invoked the Essential Commodities Act, 1955 and directed domestic refineries to prioritise LPG production for household consumption. However, this move has further limited supplies available to commercial users such as restaurants and food service operators.

India also raised LPG cylinder prices for the first time in nearly a year. Domestic cylinder rates were increased by 7 percent to Rs 913. Commercial LPG prices, which typically fluctuate more frequently, have already been increased twice this month, adding cost pressures for restaurants already dealing with supply constraints.

According to analysts at CLSA, the government is currently working to secure alternative suppliers, but meaningful supply improvements may not materialise until late April. For food delivery platforms such as Zomato and Swiggy, which depend on thousands of operational restaurant kitchens, the ongoing supply disruption could test the stability of India’s digital food delivery ecosystem in the coming weeks.