India ceramic hub faces shutdown over fuel shortages
Morbi ceramic units face a shutdown as Middle East conflict cuts fuel supplies. Manufacturers report halted exports and sharp freight cost increases today.
The ceramics and tiles industry in India is facing a severe operational crisis as escalating geopolitical tensions in the Middle East disrupt essential fuel supplies. Valued at approximately 650 billion rupees ($7 billion), the sector is centered in Morbi, Gujarat, which serves as a global manufacturing hub. Industry officials warn that the current instability threatens the livelihoods of hundreds of thousands of workers and could lead to a widespread production collapse.
The conflict involving the United States, Israel, and Iran has significantly hindered the shipment of propane and natural gas, which are vital for firing industrial kilns. Many of the 800 ceramic units in the region, which produce a variety of tiles and sanitary ware, have already received force majeure notices from fuel suppliers or have been forced to suspend operations due to shortages.
Hitesh Detroja, the chief of Lexus Granito (India) Limited, emphasized the economic difficulty of maintaining operations under these conditions.
"Restarting production without certainty of fuel availability is economically unviable."
He suggested that the present situation could potentially be more damaging to the industry than the challenges faced during the COVID-19 pandemic. In response to the crisis, Asian Granito India Limited disclosed in a recent filing that it is currently evaluating alternative fuel sources and operational measures to soften the impact of the supply chain disruptions.
Manoj Arvadiya, president of the Morbi Ceramic Association, indicated that a collective shutdown of all units in Morbi is planned for after March 15 if the fuel supply situation does not improve. This move comes as exports to the Middle East—which usually account for about a quarter of the region's 30,000 monthly export containers—have come to a complete standstill.
Niraj Kundariya, chief of global sales at Win-Tel Ceramics, noted that shipping companies have increased freight charges by 20 to 30 times, making international shipments financially impossible. To combat the energy shortage, the industry has petitioned the Gujarat state government to allow the use of coal gasifiers. These systems were banned in 2019 to address air pollution concerns, but manufacturers now view them as a necessary alternative to maintain production.
