Iran War Could Heighten Costs for Bottled Water and Beer in India

As India approaches the summer season, with temperatures projected to surpass 45C in certain regions, the nation faces an unexpected challenge. The ongoing conflict with Iran has begun to disrupt the $6bn bottled water sector, causing manufacturers to grapple with the availability of essential raw materials. Recently, market leader Bisleri raised prices by 11%, increasing the cost of a box containing 12 one-litre bottles by 24 rupees ($0.26; £0.20). Other brands, such as Bailley and Clear Premium Water, have also adjusted their pricing, as noted by Reuters news agency.

Water Dependence and Challenges

Approximately 15% of urban households and 6% of rural ones rely on bottled water for their daily needs. This reliance is costly, particularly in rural areas where financial constraints are more pronounced. However, access to clean water remains difficult in many parts of the country, especially during the summer months. Factors such as water scarcity, groundwater pollution, and inadequate infrastructure contribute to this issue.

Fuel Prices and PET Resin Impact

India’s dependence on oil and gas imports has intensified due to the near-total blockage of the Strait of Hormuz by Iran. This critical waterway, which typically handles 20% of global oil and liquefied natural gas, has disrupted shipping routes, leading to a surge in fuel prices. Vijaysinh Dubbal, president of the Maharashtra Bottled Water Manufacturers Association, highlights that the rising cost of crude oil directly affects PET resin pellets, which are used to create plastic bottles.

“The cost of preforms has climbed from 115 rupees per kg to about 180 rupees per kg. Additionally, there’s a shortage in their supply,” Dubbal states, noting that roughly 20% of bottle manufacturing plants in Maharashtra have temporarily closed operations.

While some companies have raised prices, Dubbal explains that many brands and vendors have absorbed these costs, protecting consumers from immediate price hikes. The cost of a one-litre bottle of drinking water remains around 20 rupees, while a five-litre container is priced at 60-70 rupees. However, this temporary relief may not last, as companies struggle to maintain cost absorption.

Broader Industry Implications

As a major supplier of PET preforms, Chemco Plastic Industries Pvt Ltd’s director, Vaibhav Saraogi, warns that the price surge in preforms will ripple across the entire packaging sector. India’s PET packaging market, valued at $1.5bn in 2024, is forecast to grow to $2.2bn by 2033. Beyond bottled water and beverages, PET is widely used in industries like beauty, pharmaceuticals, and food delivery due to its convenience and affordability.

Impact on Glass Bottle Manufacturers

The war’s effects extend to glass bottle production as well. Vithob Shet, CEO of Vitrum Glass—a prominent producer of amber bottles used in pharmaceuticals and brewing—attributes the price increase to fluctuating natural gas supplies. Glass manufacturers rely on natural gas to power their furnaces, which melt sand, soda ash, and recycled glass into molten blobs before shaping them into bottles.