“Butter chicken is being removed from restaurant menus across India due to rising operational costs in 2026.”

India's massive restaurant industry, which feeds and employs millions, faces severe disruption as gas shortages halt commercial supplies and force outlets to scale back their menus or shut. Zorawar Kalra, Vice President of the National Restaurant Association of India, discusses the fallout with Haslinda Amin and Menaka Doshi on Insight with Haslinda Amin.

The shortage of LPG, largely used for cooking, triggered by disruptions in shipments through the Strait of Hormuz, has forced restaurants in cities like Delhi, Mumbai, and Bengaluru to prune their menus. Your favorite gravy dishes like butter chicken and fried items like chole bhature are starting to go off the menu. However, tandoor-based dishes have survived this cut.

It is reported that the price of the 19‑kg commercial LPG cylinder has increased by ₹49 from 1 February 2026, bringing the new rate in Delhi to ₹1,740.50. This revision is likely to impact restaurants, hotels, cafés and street‑food vendors that rely heavily on LPG for daily operations.

When I walk into Plus Nine One, all I know is that it is an Indian restaurant. One glance at the menu and I realise that it is meant for serious, well-travelled palates who understand flavour because this is Indian food that does not shy away from boldly including international techniques and ingredients. There is no butter chicken or dal makhni on the menu.

As the Union Budget 2026 nears, the food delivery sector is feeling the pinch of rising costs at the restaurant level. Industry stakeholders have warned that recent tax changes and increasing operational expenses are squeezing margins, and limiting pricing flexibility on delivery platforms. Restaurant operators have said tax-related pressures are only adding to the existing challenges of rising rentals, ingredient prices, the energy costs, and regulatory compliance expenses.

From dishes that look like rocks but are actually potatoes, to shrunken menus that call for bite-sized creations, dining out in India is going to get bolder and more adventurous in the new year. In terms of formats, portion sizes across the board are shrinking. At Adda in New York City, guests can book a “butter chicken experience” that is offered to only six tables a night.

It seems like we’ve heard it before: Indian is poised to become “the cuisine of the year.” But in 2026, the experts are drilling down into “next-gen Indian” and regional specialties rather than broad-based Indian. As Lewis of Yelp points out, “2026 is shaping up to be a huge year for Indian cuisine in the US. We’re seeing big spikes in searches for ‘Indian tiffin service,’ and ‘Indian bowls,’ and there’s social media buzz around new restaurant openings."

Chefs and industry experts share food and dining trends for 2026. Healthier choices, local menus and premium experiences are what Indian diners want. There has been a shift away from deep-fried dishes, along with increasing requests for ingredients like avocado and chia seeds.

As geopolitical tensions disrupt commercial LPG supplies across India, restaurants in major hubs like Delhi, Mumbai, and Bengaluru are drastically rethinking their menus. To conserve cooking gas, many iconic eateries are stripping away slow-cooked items that require sustained heat. Legendary favorites like Butter Chicken and Dal Makhani, which are known for their long-simmered, rich gravies, are the biggest casualties of this crisis.

Geopolitical tensions in West Asia have severely disrupted commercial LPG supplies across India, impacting restaurant operations nationwide. Major culinary hubs like Bengaluru and Chennai are reporting critical shortages, leading to temporary shutdowns and menu restrictions. Crucial cooking methods, especially for dishes like Chinese cuisine and biryani that demand high-pressure gas burners, make LPG essential for about 70% of menus. This forces immediate cuts to menus, impacting what customers can order.

Margins in restaurants are notoriously thin. For many owners, these increases are not easily passed on to diners without risking demand. Some are cautiously raising prices; others are absorbing costs or redesigning menus.

The restaurant industry is grappling with rising costs and changing consumer preferences, while the IT services sector is dealing with global competition and evolving technological demands. These issues are impacting the overall economic landscape in India, as both sectors play crucial roles in the country's economy.

Commercial LPG prices have risen by ₹302.50 cumulatively in 2026 — with the latest ₹115 hike hitting on March 7. Supply has been disrupted across Mumbai, Pune, Bengaluru, Chennai, and Kolkata. The NRAI has issued a formal advisory. If you're a restaurant owner reading this, you're probably already feeling it in your daily operations and your monthly P&L. This guide covers what you can do right now to protect your margins, adapt your menu, and come out of this crisis stronger than you went in.

By 2026, restaurant design in India is poised to shift decisively toward high-end, luxury-led concepts, marked by clearer category differentiation. India’s QSR market is set to reach USD 43.5 billion by 2030 at a CAGR of 9.36%. Consumer preferences are evolving. There’s growing focus on ingredient transparency, longer fermentation, sourdough bases, better fats, and gut-friendly options.

Wonder, the fast-growing food hall/delivery venture, is adding Indian food to its roster of about 30 restaurant brands. The company on Wednesday launched Dabba, a new concept featuring Indian staples such as samosas, chicken tikka masala, butter chicken and lamb vindaloo.

As of early 2026, restaurant and takeaway prices remain high, according to a RaboResearch report. Operators continue to face pressure from rising costs and potential food price increases, forcing them to balance maintaining profit margins with keeping menu prices acceptable to customers. Many are adjusting through strategies like revising menus, reducing portion sizes, and running targeted promotions.

Pushed by dwindling LPG and soaring black-market prices, many are being forced to reshape menus, reduce staff, and return to cooking on coal and wood. Amid the West Asia crisis, the government has revised the priority order for allocating domestically produced natural gas, placing LPG production alongside CNG and piped cooking gas at the top. This has led to an alleged supply crunch for hotels and restaurants which use market priced commercial LPG.

“2026 is shaping up to be a huge year for Indian cuisine in the US. We’re seeing big spikes in searches for ‘Indian tiffin service,’ and ‘Indian bowls,’ and there’s social media buzz around new restaurant openings, like Gymkhana and Ambassadors Clubhouse.” Restaurants will dig deeper into Indian cuisine in 2026.

Despite challenges such as escalating operational costs and intense competition from fast-food chains, the market outlook remains positive, fueled by the escalating demand for unique dining experiences and the strategic adoption of digital technologies to enhance customer engagement.

Butter chicken (murgh makhani) remains one of the most popular and staple dishes on Indian restaurant menus worldwide, including in India, with no widespread reports of removal due to costs as of early 2026. Rising operational costs in India's restaurant sector are driven by inflation in ingredients, labor, and fuel, but menus typically adapt by price adjustments rather than removing iconic dishes like butter chicken.

This standout Indian restaurant in Arkansas is making waves in 2026 with its delicious curries, fresh ingredients, and must-try menu options.