West Asia War Pushes India’s Gas Import Bill Up 24% in April-July, Iran Sanctions Add to Energy Risks

India’s natural gas import bill surged 24% during April-July to $5.6 billion, compared with $4.5 billion in the same period of the previous fiscal year, due to elevated natural gas prices following disruptions to Middle Eastern supplies amid the West Asia war, data from the Petroleum Planning and Analysis Cell showed.

Key Numbers From the April-July Energy Data

• Gas import bill rose 24% to $5.6 billion from $4.5 billion in April-July FY26
• Import volumes rose 5% to 11,867 million standard cubic metres from 11,269 million standard cubic metres
• July gas import bill rose 9.1% to $1.2 billion from $1.1 billion in July 2025
• July import volumes stood at 2,915 mmscm, up 1.5% from 2,872 mmscm a year earlier
• Domestic natural gas production declined 4.3% to 11,245 mmscm in April-July FY27
• Import dependency on natural gas rose to 51.7% from 49.3% in the year-ago period

Why the Gas Import Bill Rose Faster Than Volumes

The 24% rise in the import bill against a 5% increase in volumes shows that higher prices, not higher consumption, drove the bulk of the increase. Import volumes rising modestly, while costs jumped nearly five times as fast, point directly to the price impact of Middle Eastern supply disruptions on global gas markets.

How Petroleum Product Imports and Exports Moved

Petroleum product imports, both value and volume, declined sharply:

• Import value fell 26% to $5.6 billion in April-July from $7.6 billion in the year-ago period
• Import volumes dropped 45% to 9 million tonnes from 16.4 million tonnes

The sharp fall in volumes was largely due to supply disruptions during the conflict, as refiners and oil marketing companies prioritised domestic fuel supplies and struggled to secure cargoes from the Middle East.

On the export side, petroleum product shipments fell 18% in volume terms to 16.5 million tonnes during the period, as domestic supplies were prioritised amid the global supply crunch. In value terms, however, exports rose 35% to $16.7 billion, reflecting higher petroleum product costs in line with rising oil prices.

Why Hormuz Tensions Keep India’s Energy Risks Elevated

Fresh tensions around the Strait of Hormuz, which connects Persian Gulf producers to global markets, have again raised concerns over shipping disruptions and higher energy prices, analysts said.

The bigger risk for India is not the availability of oil and gas but persistently higher landed prices that could inflate the import bill, widen the current account deficit, and weigh on the broader economy.

What the Latest Iran Sanctions Mean for India

US Treasury Secretary Scott Bessent announced a fresh wave of sanctions on Iran on August 24, putting Tehran’s trading partners on notice as Washington launched what it described as an economic D-Day campaign aimed at choking off the West Asian nation’s economic lifelines.

Experts said the latest sanctions could hit India through four channels:

• Higher crude oil prices as Iranian supply faces tighter restrictions
• Costlier freight and insurance on energy shipments through affected routes
• Tighter payment channels for energy transactions
• Renewed pressure on the rupee from higher import costs

The direct impact on India’s trade with Iran is expected to remain limited, according to experts cited in the report.

Final Outlook

India’s rising gas import dependency, now at 51.7%, and the decline in domestic production make the country more exposed to global price movements tied to the West Asia conflict. The Iran sanctions add a fresh layer of uncertainty on top of the Hormuz disruption risk.

Source: MoneyControl