India’s automobile industry is facing the risk of production disruptions as the Iran conflict tightens gas supplies, affecting manufacturers and component makers across key industrial regions. Several suppliers serving Maruti Suzuki, Tata Motors and Mahindra have reported gas shortages, raising concerns over forging, casting and paint-shop operations that depend on steady fuel availability.

The pressure comes as vehicle demand remains strong, with passenger vehicle sales expected to exceed 4.5 million units in the financial year ending 31 March. With limited buffer inventory, companies are under pressure to keep assembly lines moving. Smaller component manufacturers are seen as most exposed, as they depend heavily on gas and have limited flexibility to shift to alternative energy sources.

India imports around half of its natural gas requirements, largely from West Asia, making the sector vulnerable to regional instability. While some automakers said operations remain near normal, concerns are rising across the supply chain. S&P Global Mobility has already lowered its 2026 India light vehicle production growth forecast to 6.3 per cent from 7.4 per cent.