550 factories halt production in Morbi: Gas crisis now paralyses India's ₹750 billion industry

Morbi, India's largest ceramics manufacturing hub, has seen most of its factories shut for nearly a month after gas supplies tightened sharply in the wake of the Iran war, according to a report by the BBC.

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The town in Gujarat produces about 80% of India's ceramics, including tiles and sanitaryware, and exports to markets across the Middle East, Africa and Europe. But manufacturers halted operations this week as supplies of propane and natural gas - critical inputs for firing kilns - became constrained.

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Morbi is at the centre of India's ceramics industry, which is estimated to be worth about Rs 750 billion.  

Ceramics production depends on continuous high-temperature kiln operations powered by fuel. Any disruption risks damaging both equipment and unfinished goods.

"Roughly four out of 10 manufacturers use propane. The others use natural gas," Amit Prajapati, a manufacturer, told the BBC.

Fuel sourcing has split the industry between private propane suppliers and piped natural gas distributed by a state-run company. As supplies tightened, the impact spread quickly across units.

"About 550 factories have halted production, while a few using piped natural gas remain operational, depending on availability," Mukesh Kundariya, adviser to the Morbi ceramics manufacturers' association, was quoted as saying.

Overall, around 80% of manufacturers in Morbi - particularly larger units - have suspended operations. The shutdown is expected to continue until April 15, the report said. 

The strain is not limited to large industrial clusters. In Kolkata, Nahoum and Sons - a 120-year-old bakery in the New Market area - has temporarily shut operations after struggling with cooking gas shortages linked to the same regional crisis.

A notice at the store said it would remain closed from March 18 to March 22 due to "unavoidable circumstances".

"We were continuing operation despite limited commercial LPG cylinder supply, but production had to be scaled down significantly. Eventually, it became unfeasible to operate under such constraints, and a temporary shutdown was the only option," Jagadish Haldar, an official at the outlet, was quoted as saying by PTI. 

In Delhi, the shortage of commercial LPG cylinders has also affected restaurants and street food vendors for more than a week. Operators report reduced working hours, limited menus and sharp revenue losses.

"Over the past 10 days, business has taken a severe hit. Earlier, our average daily billing across branches was around Rs 3 lakh, but it has now dropped drastically to just about Rs 25,000 to Rs 30,000," a representative of the Tadka Rani restaurant chain said.

Across sectors, the gas supply disruption tied to the West Asia conflict is now feeding into production, pricing and availability, with effects visible from large export industries to small urban businesses.