Chandigarh: Local micro, small and medium enterprises (MSMEs) and the hospitality industry are facing significant pressure due to escalating raw material prices, fuel costs and supply disruptions triggered by the ongoing Iran-US war.Since the conflict began, the cost of key raw materials such as metals and plastics used by hundreds of industrial units in the city has surged between 10% and 100%. Chandigarh hosts a large number of ancillary units that manufacture spare parts and input components for larger industries across the region.Naveen Manglani, a manufacturer of railway coach parts and spokesman for the Chamber of Chandigarh Industries, highlighted the severity of the situation. “The cost of raw material such as steel has increased by at least 20% since the beginning of the war. The worst impacted are ancillary units manufacturing inputs for the larger industries,” he said. “Most of these units are locked in medium- and long-duration contracts, so the sudden increase in the cost of raw materials has to be absorbed by them rather than passed on to the end user. Manufacturers of spare parts for railways, tractors, automobiles and others have seen their input costs rise sharply.”Manufacturers in plastic moulding — producing household plastic appliances, bottles and similar items — as well as sanitary ware producers have witnessed a sharp rise in raw material costs in just the last fortnight, Manglani added.Anil Selhi, a manufacturer of plastic components, revealed that the cost of key raw materials has nearly doubled, compounded by serious supply constraints. “At present, manufacturers are somehow managing the increasing financial burden, but if the war continues and there are further shortages and price escalations, it will become extremely difficult for us to sustain operations,” he warned.Uday Kumar, who manufactures bathroom fittings, shared similar concerns. “The cost of plastic raw material has nearly doubled. Surprisingly, even the cost of materials such as bronze has gone up since the war began,” he said. He also noted that while initial disruptions in energy supply have eased, the availability and pricing of commercial LPG remain major worries.The hospitality industry is emerging as one of the hardest-hit sectors in the city. Most restaurants, eateries and hotels rely heavily on commercial LPG for daily operations.A senior UT official confirmed that gas agencies have been instructed to fulfil only 20% of the demand placed by commercial consumers. Alongside restricted supply, the effective price of commercial LPG cylinders has also risen significantly since the outbreak of hostilities in the Middle East.In response, several establishments have been forced to take tough measures: trimming menus, switching to alternative cooking methods or passing on higher costs to customers through price hikes. “Food items cooked in tandoor are the least affected, while wok-based dishes have been hit the hardest. Some restaurants have even dropped high-gas-consumption delicacies such as ‘jalebi’ from their menus,” said a restaurant operator who preferred to remain anonymous.“In contrast, restaurants and hotels that depend on Piped Natural Gas (PNG) are currently facing minimal disruption. However, Neeraj Bajaj, chairman of the Chandigarh Business Council, struck a cautionary note about the future. “The longer the war stretches, the bigger the worry for the hospitality industry. Apart from LPG availability, rising raw material costs and potential drops in consumer demand due to the war could add to the pressure,” he said.Adding to these concerns is the fear of declining tourist arrivals, as international and even domestic air travel becomes more expensive and subject to restrictions amid the escalating conflict.
