The ceramic industry crisis has intensified significantly, with 550 factories now halted according to Mukesh Kundariya, adviser to the Morbi ceramics manufacturers' association, as reported by the BBC. This represents a substantial increase from the 400+ plants previously closed and indicates the crisis has reached critical levels. About 80% of manufacturers in Morbi - especially larger units - have shut operations, with the shutdown expected to continue until 15 April. The fuel shortage has worsened rapidly, leaving factories unable to maintain continuous kiln operations, which are required to avoid damage to equipment and unfinished products. As BBC reports, factories that rely on propane have shut as supplies have dried up, while natural gas remains available but most units using it have stopped because prices have become volatile and unpredictable.
The crisis stems from India's 60% dependence on imports for liquefied petroleum gas (LPG) demand, with the overwhelming majority coming through the Strait of Hormuz waterway that has been effectively blocked by Iran after US-Israeli strikes. The US and Israel launched strikes on Iran on 28 February, triggering retaliation and disrupting shipping through the Strait of Hormuz - a key route for much of India's gas imports. Since Monday, three Indian-flagged ships - two carrying liquefied petroleum gas and one crude oil - have reached Gujarat via the conflict-hit strait, but around 21 vessels remain stalled in the region. The ceramics hub at Morbi makes up 80% of India's total production and is one of the world's largest ceramic manufacturing centres, exporting tiles to countries like the United States, Middle East, Africa and Europe. The industry provides direct and indirect employment to nearly 400,000 people, making this disruption particularly severe for the sector.
Industry leaders are adapting to the crisis with significant cost adjustments and operational changes. Jitendra Aghara of Simpolo Tiles, one of Morbi's biggest manufacturers, has kept operating by buying propane at more than double the price it was before the war to ensure customer orders are fulfilled. Manufacturers like Hitesh Detroja's Lexus Granito plant, which produced 30,000 tiles per day, are facing severe financial pressure with monthly fixed costs and loan interest of $74,000 each. The tile industry developed in Gujarat due to clay availability and good transport connections, but relies on overseas energy to fire kilns, making it particularly vulnerable to supply disruptions. As BBC reports, keeping the kilns hot means plants operate around-the-clock, and emergency shutdowns can damage machinery, creating continuous operational challenges.
The ripple effects of the energy crisis have been severe throughout the Morbi ecosystem. Morbi's ceramics industry employs about 400,000 people, many of them migrant workers from northern and eastern India, whose livelihoods have been hit by the shutdown. They work across factories and in allied sectors such as logistics, packaging and exports, with many heading back home. Morbi's 3,000-odd ceramic sellers and distributors are relying on existing stocks, with fresh supplies cut off for at least a week. Traders warn that if the shutdown persists, domestic shortages could emerge, with inventories likely to start shrinking from April. Export orders could also face delays, and prices may rise if output does not resume quickly - although the scale of any increase will depend on how long fuel supplies remain disrupted. India's ₹750 billion ceramics manufacturing industry has gone from operating at full capacity to having blazing-hot kilns go cold, with thick layers of dust smothering giant grinding and pressing machines.
The ceramic crisis is being positioned as an opportunity for investors rather than a market threat, according to analysis from Moneycontrol. The supply-side nature of the disruption suggests that companies with strong operational capabilities and strategic positioning may be better positioned to benefit from the market consolidation that could follow. Industry experts note that alternative fuels can't replace gas 100% just yet, creating a transition period where traditional manufacturers may face temporary challenges while new technologies develop. The crisis is expected to reshape industry structure and create opportunities for investors who can identify companies well-positioned to capitalize on the changing market dynamics. As BBC reports, while the current crisis is described as 'horrible' by industry participants, some manufacturers like Aghara believe they can recover losses in the future, though the immediate impact on employment and supply chains remains significant.
