The Middle East crisis continues to boil and the ripples have triggered an operational stress for India’s food services sector. As LPG supply flows are disrupted amid the Strait of Hormuz transit issues, industry voices have warned of layoffs, salary cuts and widespread business impact if the situation drags on. Despite assurances from the government on boosting availability, restaurant owners and caterers have flagged that access to commercial LPG remains inconsistent, leaving many scrambling to keep operations afloat. Several described the situation as unpredictable, with little clarity on when normal supply will resume.Anjan Chatterjee, founder of Speciality Restaurants pointed to the growing distress across the sector. Highlighting the uncertainty of the situation, Chatterjee told ET that people are running from pillar to post. The founder further cautioned that the worst-hit would be workers at the lower end of the chain. “If restaurants and eateries are unable to do business, the first ones to get hit will be people down below.”

Impact on businesses, especially smaller players

Smaller restaurants, street-side eateries, caterers and cloud kitchens are the worst affected, with many already shutting or scaling down. Anjan Chatterjee of Speciality Restaurants described the chaos, saying people are running from pillar to post, and warned, “If restaurants and eateries are unable to do business, the first ones to get hit will be people down below.” He added, “While we hope supplies improve soon, currently, the situation is dynamic and we don’t know how things will pan out. At the ground level, particularly for local and street-side eateries, things are much worse.”Kirit Budhdev of the Federation of All India Caterers flagged worsening delays, “Suppliers are telling us to wait for 15 days. The on-ground situation is very challenging and it’s actually worsening for a lot of our members.”

Financial strain and risk of layoffs

The shortage is hitting profitability, menus and operating hours. Sagar Daryani of the National Restaurant Association of India said, “Smaller players which cannot bear the loss will see job cuts and the bigger players may bear the brunt for a while,” adding that multiple aspects of operations will be impacted.The strain is cascading to workers, especially those at the lower end. Aditya Narayan Mishra of CIEL HR explained, “For instance, if a restaurant has to close shop or run for fewer days in a week, they will not be employing helpers, local delivery boys, etc., who typically get paid Rs 500-700 daily. This segment, which accounts for the largest number of people employed, is already seeing an impact.”In Pune, Ganesh Shetty said, “Our members are still being told by agencies and suppliers that the supply is not for them but for other priority sectors like hospitals. Smaller restaurants have already shut down and they are not operational in Pune.Meanwhile, street food vendors in Madhya Pradesh are facing mounting pressure as a shortage of commercial gas cylinders disrupts operations, particularly for pani puri stalls and similar snack sellers. The impact is clearly visible across key markets such as Kolar, Jawahar Chowk and the BHEL area, where several carts remain closed or operate only during limited peak evening hours. Vendors who once catered to regular crowds are now struggling to secure enough fuel even for basic preparation.

Turning towards alternatives

Cloud kitchens are also under pressure, with FreshMenu’s Rashmi Daga noting, “At a central level, we are trying to move to firewood cooking, bring in induction, electric stoves, etc. But one can’t just move seamlessly to electric equipment given that summer months will also see power cuts.” At the same time in MP, two villages, Bandarkol in Jabalpur district and Baghuwar in neighbouring Narsinghpur, remain largely unaffected, with kitchen stoves continuing to run smoothly. In these villages, residents have turned to biogas instead of LPG cylinders. In Bandarkol, several households have installed small biogas plants that convert cattle dung into cooking fuel. Villagers say the system requires only a few minutes of daily effort while ensuring a steady supply of fuel for use throughout the day.

Uncertainty and outlook

Industry stakeholders say the situation remains volatile, with no clear timeline for recovery. While there has been slight easing compared to earlier days, supply gaps persist, and businesses continue to operate under uncertainty as they brace for prolonged disruption. Chatterjee added that while there is hope for improvement, conditions on the ground remain volatile. “While we hope supplies improve soon, currently, the situation is dynamic and we don’t know how things will pan out. At the ground level, particularly for local and street-side eateries, things are much worse,” he said. Speaking to ET, Rashmi Daga also highlighted the uncertainty ahead, saying, “One can’t even plan for perishables without knowing if gas is available the next day. Right now, the industry is bracing for 40-60 days of pain, but who knows, it could continue for months, too. If this happens, we will have no choice but to send some workers home.” The All Assam Restaurant Association (AARA) has called on the state government to urgently ensure a dedicated supply of commercial LPG cylinders for the hospitality sector, cautioning that continued shortages could force restaurants and hotels across the state to shut down operations entirely. The association has appealed to CM Himanta Biswa Sarma to step in, describing the situation as an “escalating commercial LPG crisis” impacting the restaurant industry in Assam. Members said that eateries across the state are grappling with an abrupt disruption in the supply of commercial LPG cylinders, leaving many struggling to function.