West Asia Turmoil Cuts Tourist Inflow; Aviation Sector Braces For ₹18,000 Crore Loss

The West Asia crisis is beginning to impact Indian industries, with aviation expected to bear the most immediate and severe hit.

According to the PHD Chamber of Commerce and Industry, the aviation sector incurred losses of around ₹18,000 crore due to the crisis.

The report further states that the disruption is spilling over into other sectors, such as hospitality, restaurants, and tourism businesses.

Aviation Bears The Brunt

India’s aviation sector faced constrained airspace, extended flight paths and cancellations between February and March 2026. For instance, IndiGo mentioned that they had to cancel at least 72 flights on 28 February and later cancelled 203 flights on 2 March 2026. In a similar vein, Air India suspended flights to destinations across West Asia, and about 50 international flights were cancelled, prompting action from SpiceJet and other airlines.

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Tourism Softens As Hotels Hold Occupancy Under Margin Pressure

The report further states that inbound travel has decreased significantly as global travellers are adopting a more cautious approach. The decline is estimated to be around 15% to 20%. Apart from this, the hotel industry in India is facing margin pressure because of higher input costs, unpredictable international demand and increasing energy prices.

The restaurant and food services industry is showing a mix of trends right now. Estimates, aligned with the National Restaurant Association of India, suggest input costs have risen by 10 to 15%, driven by costlier imports, logistics, and energy.

Sources:

Economic Times

CNBC

Forbes