Iran-Israel Conflict Disrupts India's Real Estate Sector: Supply Delays and Rising Costs

The ongoing geopolitical tensions in West Asia, particularly the Iran-Israel conflict, have begun to weigh heavily on India’s real estate sector. Developers are reporting delays in project completion due to supply chain disruptions and rising input costs.

Shortage of tiles & sanitaryware emerging as critical concern

Industry stakeholders have flagged shortages of key finishing materials such as tiles and sanitaryware, driven largely by gas supply constraints, as a critical concern. These disruptions are expected to push possession timelines, especially for projects in advanced stages.

CREDAI-MCHI Chief Operating Officer Keval Valambhia noted that the conflict has led to significant supply-side challenges. Shortages of gas and LPG have impacted the production of energy-intensive materials like tiles from Morbi, which supplies over 80% of the market need. “Distributors have increased prices due to limited availability, but the situation remains manageable currently,” Valambhia said. He warned that if the conflict continues, project possession timelines could extend by two to three months.

Marble & tile industry hit hard: 80% of factories shut down

The marble and tile industry has been particularly hard hit. Gajendra Bhandari, President of the Vile Parle Marble Association, said that nearly 80% of factories have shut down. According to Bhandari, major firms are now insisting on full advance payments and have stopped accepting new orders without prior confirmation.

Deep Vadodaria, CEO of Nila Spaces, explained that the conflict affects projects at multiple levels. Beyond finishing materials like façade glass, core inputs like steel and cement are witnessing price pressure due to rising crude oil prices. Vadodaria described this as an indirect “war tax” on the sector, where developers deal with both cost escalations and procurement uncertainty.

Anand Gupta, a member of the Builders Association of India, said the availability of sanitaryware is hampered by chemical supply issues. The conflict has led to a shortage of essential chemicals used in the production of sanitaryware, further complicating the supply chain.

The real estate sector in India is now facing a multi-faceted challenge. Developers are not only dealing with the immediate impact of supply chain disruptions but are also bracing for the long-term economic consequences of the ongoing geopolitical tensions. The industry is closely monitoring the situation and exploring alternative suppliers and materials to mitigate the impact of the conflict.