India's Tile Industry on Brink Due to Middle East Conflict

India's substantial 650 billion rupees ($7 billion) ceramics and tiles industry faces an imminent crisis, jeopardizing hundreds of thousands of livelihoods. The escalating Middle East conflict has disrupted crucial fuel supplies, primarily propane and natural gas, essential for firing kilns. Morbi, located in Gujarat and recognized as a world-leading ceramic manufacturing hub, is at the epicenter of this threat.

Many of the approximately 800 ceramic units in Morbi have already experienced fuel supply cuts and a complete pause in exports to the Middle East. Some factories reliant on propane have ceased operations or are on the verge of shutting down, with some opting to provide on-site lodging for their workforce. Companies depending on natural gas are receiving force majeure notices from suppliers, compelling production suspensions.

The situation poses a graver threat than the COVID-19 pandemic for the industry. Exports to the Middle East, which typically account for a quarter of Morbi's monthly export containers, have completely stopped. Additionally, shipping companies have drastically increased freight charges by 20-30 times, rendering exports economically unviable. The industry is urgently seeking governmental assistance, proposing the use of coal gasifiers as an alternative fuel source, a measure previously banned in Morbi due to pollution concerns.