India managed the early phase of the energy crisis better than many expected. A mix of domestic demand, coal and renewables, along with some buffer supplies, helped cushion the initial impact. But that resilience is now fading. The country’s heavy reliance on imported crude oil, LNG and LPG is beginning to show clear consequences. While alternative supplies have been secured in some areas, particularly for fertilizers and LPG, the same cannot be said for natural gas.
That gap is now translating directly into industrial disruption.
One of the clearest examples is the ceramics sector. In India’s largest ceramic manufacturing hub, Khurja, where 90% of the 300 production units have already shut down because they cannot access sufficient gas. These are not marginal operations; they employ hundreds of thousands of workers. What started as a supply issue is now feeding into production losses, job risks and broader economic slowdown. Efforts to diversify supply have helped, but only partially. Imports from Russia, Australia and other sources have filled some of the gap, but not enough to restore previous operating levels.
At the macro level, the pressure is also building. Inflation is rising, the current account deficit is widening, and the currency is under strain. These are no longer early warning signs, they reflect the reality of sustained import dependence in a disrupted market. If the crisis continues, the impact will deepen. What is now visible in specific sectors could quickly spread across the wider economy. For India, this is no longer just an energy issue, it is an economic challenge that is becoming harder to contain.