Ahmedabad: Global tensions and their impact on supply chains have hit yet another industry in Gujarat, with nearly 80% of the state’s small soap and detergent manufacturing units shutting down due to a severe raw material shortage, pushing the sector into one of its worst crises in recent years.

The closures have affected hundreds of MSME units and left thousands of workers jobless. Industry representatives estimate that Gujarat has around 850 registered small and medium units in this segment, supporting the livelihoods of nearly 25,000 to 30,000 families. With close to 90% of units now non-operational, an estimated 15,000 to 20,000 workers have lost their jobs.

Naresh Jain, chairman of the Gujarat Small Scale Detergent Manufacturers’ Association, attributed the crisis primarily to a sharp spike in the price of acid slurry (LABSA), a key raw material used in detergent production.

He said prices have surged from around ₹135 per kg in January to nearly ₹300 for local units. In contrast, multinational companies benefit from long-term supply contracts, enabling them to procure the same material at significantly lower rates. He also alleged that an artificial shortage has further aggravated the situation for small manufacturers.

The association added that other input costs have also risen sharply. Packaging material prices have nearly doubled, with soap packaging costs increasing from ₹36 to ₹70. Small manufacturers, who primarily compete with multinational brands in rural markets, say they are unable to sustain current retail prices amid rising production costs.

If the situation continues, consumers are likely to face higher prices for finished products. Industry stakeholders have urged the government to intervene, proposing a 20–30% raw material quota for MSMEs to help stabilise production, as most small units can store only up to 20 days’ inventory. With the festive season approaching, they warned that without timely intervention, the crisis could deepen further, impacting both livelihoods and market prices.