India’s ceramic industry in Morbi, Gujarat, is in big trouble. Almost 100 factories have already closed because of a lack of propane fuel caused by the growing conflict between the US, Israel, and Iran. This disruption puts hundreds of units and the jobs of hundreds of thousands of workers at risk.
Crisis Overview
As of March 5, 2026, around 100 ceramic units in Morbi, Gujarat, that relied on propane stopped working after two days without fuel. Industry officials said that up to 400 more firms could close in a week if propane doesn’t come back, which could lead to a full cluster shutdown by mid-March. The dispute has stopped exports across the Strait of Hormuz, leaving ships stuck and forcing suppliers like Gujarat Gas to declare force majeure.
Root Cause: Mideast Fuel Disruptions
The US-Israel war on Iran has suffocated imports of propane and natural gas from the Gulf, used to be burning kilns above 1,200°C. Morbi depends on burning 5,500 tonnes of propane per day (70% for units) and uses 2.7 million cubic meters of natural gas that also slumped in supply by half when deliveries stopped. Executives say security risk and Iran control cause shipping reluctance and backlogs that far surpass those of COVID.
Morbi’s Ceramic Powerhouse
Morbi accounts for 80-90% of India’s ceramics and tiles market, worth ₹65,000 crore ($7-8 billion) a year, including exports. Globally, the eighth largest hub employs 4-5 lakh saffron workers directly and indirectly across 800-900 units. Contents are largely of vitrified tiles, sanitaryware and roofing tiles; daily’s production exposed to losses of around ₹1,000 crore.
Economic Fallout
Despite ready shipments, factory closures do delay exports (particularly to Mideast markets); freight costs soar 20-30%. On-site food and lodging stops attrition, but extended shutdown would wipe out jobs and income Asian Granito and Lexus Granito, companies, also search for alternatives to no avail since resuming the industry without fuel assurances is not a sustainable solution.
Industry Response and Outlook
Manoj Arvadiya, head of the Morbi Ceramic Manufacturers Association, says the government should step in to help with alternate fuels or stockpiles. Companies want LNG switches, but other energy problems, including Qatar shutdowns, make it hard to do so. If the problem isn’t solved, a collective closure after March 15 is likely, which would raise India’s import bill as world prices rise.