The BRICS TimesIndian Economy News: The Ministry of Commerce and Industry recently released March 2026 data for eight core sectors. Compared to March 2025, the economic picture looks increasingly worrying for the nation.
Iran War Impact on the Indian Economy
The conflict involving Iran, the US, and Israel is now directly affecting Indian farmers. In March 2026, fertilizer and urea production crashed by 24.6% compared to the previous year. This means production fell by nearly one-fourth. These official figures were recently shared by the Ministry of Commerce.
Urea Shortage Caused by War
Fertilizer output dropped significantly by 24.6% since March 2025. Natural gas is the essential raw material for urea production. India imports large quantities of this gas from the Middle East. However, the Iran war has choked the Strait of Hormuz. This vital sea route handles one-third of the world’s fertilizer trade. Since the route is blocked, gas supplies stopped and urea production stalled.
Impact on the Farming Season
The Kharif sowing season for crops like paddy and soybean is approaching. This period requires the highest amount of urea. Over 45% of Indians depend on agriculture for their livelihood. A urea shortage forces farmers to buy expensive supplies or face lower yields. Either way, the Indian farmer bears the heavy financial loss.
Multiple Sectors Facing Struggles
The crisis extends beyond fertilizers to other major industries. Crude oil production fell by 5.7% during this period. Coal output dropped by 4%, causing electricity generation to dip by 0.5%. There is a direct link between less coal and lower power. Fortunately, domestic natural gas production rose by 6.4%, providing some relief.
Construction Sectors Show Resilience
Steel production managed to grow by 2.2% despite the global tension. Cement output also rose by 4% as construction projects continued nationwide. However, the overall index for all eight industries fell by 0.4% in March 2026. For the full fiscal year 2025-26, growth was a mere 2.6%.
Performance of India’s 8 Core Sectors During Iran War
Coal fell 4% as shipping route disruptions hit imported coal supplies. Fertilizers saw the biggest hit, crashing 24.6% due to halted Iranian supplies. Crude oil dropped 5.7% as tensions affected refinery supply chains. Electricity dipped 0.5% due to coal shortages and expensive LNG costs. Natural gas rose 6.4% because domestic production offset some import losses. Refinery products grew by a tiny 0.1% as operations barely continued. Steel increased by 2.2% thanks to strong domestic demand. Cement rose 4% as infrastructure projects kept the market active.
