Morbi: The ripple effects of the ongoing Iran–Israel war have reached the world-renowned ceramic industry in Morbi, leading to the closure of approximately 100 ceramic units in just two days. The crisis stems from a severe disruption in propane gas supply, leaving manufacturers struggling to maintain operations.

Escalating Supply Crisis

According to Manoj Arvadiya, President of the Morbi Ceramic Association, propane supply companies have exhausted their stocks, forcing 100 factories to halt production. Industry leaders warn that if the situation does not stabilize, the number of shuttered units could skyrocket to 450 in the coming days. The crisis is further exacerbated by the fact that 70–80% of ceramic manufacturers in the region depend on propane for their operations.

Beyond propane, the broader gas supply is also under threat. Gujarat Gas and Petronet LNG have invoked “force majeure” clauses, citing the Middle East conflict and disruptions at the Strait of Hormuz as reasons for their inability to fulfill standard supply contracts. This has resulted in a 50% reduction in gas availability for many industrial clusters.

Arvadiya, who also runs Bluezone Vitrified, said the crisis has already impacted his business operations. “I operate three ceramic units. Two of them, which run on natural gas supplied by Gujarat Gas, are still functioning. However, the third unit that depends on propane has been shut down, and around 50% of the contract workers associated with it have been temporarily asked to leave,” he said.

Other manufacturers in the region are preparing for similar shutdowns as their propane reserves begin to deplete. Another businessman said that his two units operate on propane gas. “We have enough stock to sustain operations for about two more days. After that, we will have no option but to shut down production,” he said.

Impact on Workers and Economy

The shutdown directly threatens the livelihoods of nearly 4 lakh workers. To prevent a mass exodus of the workforce, which would delay any future recovery, factory owners have adopted a humanitarian approach:

Credit for Rations: Owners and contractors have guaranteed local grocers that workers can purchase essential supplies on “credit,” with the industry bearing the cost.

Housing Security: Workers have been assured they can remain in labour colonies and quarters without being asked to vacate.

Economically, the industry is reeling. With production halted, exports have stalled, and billions of rupees in credit remain stuck, making recovery difficult for entrepreneurs who must still cover fixed monthly costs.

Maintenance Mode Likely

To prevent immediate layoffs, several units may initially shift to maintenance operations. “We plan to opt for a maintenance shutdown so that at least some workers can continue to remain employed. What happens next will depend on when propane supplies are restored,” Jetpariya added.

Out of nearly 900 ceramic units in the Morbi cluster, about 70% rely on propane as their primary fuel, highlighting the sector’s strong dependence on imported energy sources. The cluster’s overall fuel consumption, measured in gas-equivalent terms, ranges between 7 and 7.5 million metric standard cubic metres per day (mmscmd). Of this, approximately one-third is natural gas, while the remaining two-thirds is propane.

Notably, the combined annual turnover capacity of these units is estimated at around ₹70,000 crore. Of this, nearly ₹20,000 crore comes from exports, while the remaining revenue is generated from the domestic market.