The war in the Middle East has done what the pandemic once threatened: it has shaken the foundations of India's tourism and hospitality sector from the skies (flight surcharges) down to the kitchen stove (LPG delays). A report released in April 2026 by the PHD Chamber of Commerce and Industry (PHDCCI), titled Impact of the West Asia Conflict on India's Tourism, Aviation & Hospitality Sectors, paints a granular picture of how a regional conflict 3,000 kilometres away is hurting everything from luxury hotels in Bengaluru to neighbourhood restaurants in Chennai.
The damage first began at 35,000 feet. The Ministry of Civil Aviation data revealed that Indian carriers, which once operated 300 to 350 flights a day to the Middle East, have been flying just 80 to 90 since hostilities erupted on February 28, 2026. That adds up to over 10,000 cancelled flights since the conflict began.
The PHDCCI report, drawing on data from credit ratings agency ICRA, notes that between February 28 and March 5 alone, Indian airlines cancelled roughly 1,770 international flights, nearly 46 per cent of their scheduled international operations in that window. With more than 40 per cent of India's long-haul international connectivity flowing through Middle Eastern transit hubs like Dubai, Doha and Abu Dhabi, the consequences have been severe: longer routes, higher fuel burn, surging airfares, and more.
Inbound tourism has taken a direct hit from this. Industry body IATO reports a 15–20 per cent dip in leisure traveller arrivals, with long-haul source markets in Europe and North America turning especially cautious. Booking windows have shrunk, confirmed travel groups are thinner, and overseas partners are delaying payments, squeezing the cash flow of small tour operators who have the least cushion to absorb the shock.
The restaurant sector, meanwhile, is contending with another crisis: commercial LPG. India imports roughly two-thirds of its LPG needs, with about 90 per cent of those imports transiting through the Strait of Hormuz. With supply chains disrupted, the government prioritised domestic household cylinders, leaving restaurants scrambling. NRAI President Sagar Daryani told media that nearly 10 per cent of restaurants have temporarily shut down, and 60–70 per cent have switched to induction cooking, reduced menus, or shorter hours. Dining-out frequency has fallen 8–10 per cent, and average customer spend is down 6–8 per cent. The report estimates this amounts to a roughly ₹79,000 crore monthly loss to the food services industry.
Hotels are holding on, but mainly on the strength of India's own travellers. The PHDCCI report notes a marginal demand softening of about 10 per cent in metro markets like Delhi, Bengaluru and Hyderabad, while leisure destinations like Goa have actually seen a 15 per cent uptick in domestic travel.
Even as global tourists stay away, Indians are travelling more, through staycations, bizcations, weddings and pilgrimage circuits. The report calls on the government to rationalise aviation turbine fuel taxes, cut state-level VAT on ATF to 4–5 per cent in major hubs, fast-track PNG connections to restaurant kitchens as a substitute for LPG, and expand the e-Visa programme to offset the decline in traditional inbound markets.
