TL;DR
The Indian government has increased commercial LPG allocation by 20% to aid the auto and other critical industries, aiming to stabilize production amidst ongoing gas supply disruptions and geopolitical tensions.
The Indian government has taken steps to mitigate the impact of ongoing gas supply disruptions on key industries, including the automotive sector. On Friday, it increased commercial LPG allocations by 20%, aiming to reach 70% of pre-crisis levels. This additional supply will prioritize labor-intensive sectors such as steel, automobiles, textiles, dyes, chemicals, and plastics, which are crucial for broader economic activity.
The measure is intended to stabilize industrial operations, with Prashant Vasisht, senior vice president at ICRA, noting that increased domestic LPG production and alternative imports have "reduced the deficit, providing some comfort." Auto component manufacturers, particularly forging and casting units, have continued production, with some shifting to in-house solar-powered electrical heating to navigate the situation. An exporter from Chennai highlighted that transitioning to renewable energy helped in managing the situation, even as inventories have reduced from 15-20 days to 2-3 days.
