The economic fallout from the West Asia conflict, which started in late February after the killing of Iran’s top leader by American and Israeli forces, has already hit India hard, with further consequences expected in the months ahead, according to a senior logistics executive.
“The wider effects of the crisis are expected to appear more sharply over the next few quarters rather than right away,” said Vineet Agarwal, Managing Director of Transport Corporation of India Limited (TCI), during an interview.
A shift from road to rail transport may occur as road freight costs rise with fuel prices, he noted. The company is prepared for such changes because it also runs rail and coastal shipping operations.
Demand could weaken in upcoming quarters, and prices are likely to climb alongside fuel costs. Sectors such as ceramic tiles and paints have already faced the strongest pressure.
Industries dependent on gas have experienced reduced supply or higher prices, raising production expenses. Tiles, paints, extrusion, and metal processing have shown clear strain from increased energy costs.
West Asia serves as a key trade route for crude oil, natural gas, and cargo linked to Indian imports and exports. Fertiliser supplies have faced notable disruption as a result.
Even if tensions ease, supply chains usually require several months to recover because container movements stay affected for long periods, he stressed.
Recent years have brought repeated shocks, including COVID-19, the Russia-Ukraine war, the Suez Canal blockage, and the current West Asia situation. These events now appear to create extended delays in global supply chains.
Business volumes in March were lower than usual at the financial year-end. Many small factories encountered gas shortages that reduced output and cargo movement.
Bunker fuel prices nearly doubled during that time, prompting a 25-30% rise in coastal shipping rates. Diesel prices have also increased recently, signalling a broader upward trend.
This rise is expected to push inflation across sectors, with road freight rates climbing and additional cost pressures emerging in various industries.
Labour has moved away from some industrial clusters toward home regions due to lower job availability and election-related factors. Several states have raised minimum wages, increasing operating expenses.
Fleet utilisation remains stable. The company owns 1,200–1,300 trucks and manages nearly 10,000 more through partners, allowing flexible adjustments.
Freight rates may rise by around 10% over time as diesel costs are passed on.
In the fourth quarter of FY26, TCI posted consolidated revenue of ₹1,336 crore, up 11.6% from ₹1,197 crore a year earlier. EBITDA grew 7.4% to ₹174 crore, while profit after tax rose 8.7% to ₹125 crore.
For the full year, revenue increased 9.4% to ₹4,965 crore and profit after tax grew 10.6% to ₹460 crore.
The company expects 10–12% revenue growth in FY27, partly driven by higher freight values rather than volume alone.
Capital expenditure of ₹550–600 crore is planned for the current year, up from ₹370 crore in FY26, including spending on land, buildings, and new assets.
