Gujarat Hardlook | West Asia conflict chokes energy supply, uncertainty looms, ceramic capital presses pause

At the factory, one worker held an acetylene torch to the kiln while a few others were reassembling the package. In another large adjoining shed, construction workers were setting up a massive tile press.

A truck carrying a shipping container outside Morbi city. (Express Photo)

These scenes, played out across over 515 units located within metres of each other

producing wall tiles, vitrified tiles and floor tiles in Morbi district of Gujarat – their workforce down to the bare minimum.

Every part of the Morbi ceramic industry ecosystem has been affected by something that is out of their control: a conflict in West Asia. While the sanitaryware-making units running on natural gas continued to run low key, the propane-powered tile-making units were shut down.

Propane-LPG tanks at a tile manufacturing unit in Morbi. (Express Photo)

On March 19, when most parts of Gujarat experienced inclement weather and strong winds blew ceramic dust into the air, Kera Vitrified LLP factory worked on a skeleton crew with most of the 100-odd workers sent home at least till April 15 after the Morbi Ceramics Manufacturers Association (MCMA) on March 17 announced the closure of the industry due to fuel shortage.

On the same day, Mono Bathware factory, which manufactures sanitaryware, located 14 km north-west of Morbi on the road to Kandla Port, was running at full capacity when The Indian Express visited it. The reason: the natural gas such sanitaryware units use  continues to be supplied – for now – through a pipeline from Gujarat Gas Ltd. The Public Sector Unit (PSU) continues to power about 110 such factories which produce sinks, commodes and bath tubs.

The tile factories, however, went into maintenance mode because of the Propane-LPG shortage following the West Asia conflict that started on February 28 when the US and Israel attacked Iran. Iran has retaliated by targeting Israel and several of its Gulf neighbours where the US has its military bases. Iran controls the Strait of Hormuz, a key shipping route through which 20 per cent of the world’s energy is transported. Since the conflict, very few ships have been allowed by Iran to cross the Strait. The blockade has resulted in severe disruptions in energy supply to many countries, including India.

The Government of India asked companies to prioritise LPG gas supply for household cooking. This led to the strangling of Propane-LPG stocks available for industrial use, with the final remnants burning up in kilns by March 17.

Tiles laid out outside a factory in Morbi. (Express Photo)

Complete closure by March 24?

The sanitaryware units are also expected to close by March 24 because units using natural gas have had supply curtailed to 80 per cent of average consumption as per the Natural Gas (Supply Regulation) Order, 2026 (Gazette notification) dated March 9, 2026.

While Gujarat Chief Minister Bhupendra Patel is said to have assured continued supply in a meeting with the MCMA on March 10, factory owners fear the likely new, increased rates may cut into their margins, making production untenable.

The MCMA’s letter to Union Minister for Petroleum and Natural Gas Hardeep Singh Puri, on March 12, seeking relief on the restrictions imposed on natural gas supply, did not yield the desired result and the industry declared a general suspension of production on March 17.

Ajay Marvadiya, president of the sanitaryware division of the Morbi Ceramics Manufacturers Association, tells The Indian Express, “In sanitaryware units, we use natural gas since the then-CM Narendra Modi set up the pipeline of Gujarat Gas Ltd. Currently, we are getting 80 per cent of demand according to the notification of the Government of India. Our plants will be able to run till March 24.”

“It is a labour-intensive industry that employs 100-125 workers per unit, as opposed to that of tiles, which is more automated. The government has also asked us to keep up production so that employment of workers is not affected,” Marvadiya said.

“Our main problem after March 24 is going to be the likely higher price of natural gas. We hope the decision on the new price happens soon so that we can then decide the impact on our production costs and then plan for April. We are currently getting it at Rs 42 per cubic metre plus GST. We expect that it may go up to Rs 54-55. It will be beneficial if we get it at Rs 50,” he said.

Marvadiya said the industry could take an increase of 2-5 per cent at current product margins but if the cost of fuel rises beyond that, the burden would have to be passed down to the consumer. He said that demand is also down because of the slowing growth in the real estate market.

In total, there are about 650 major and about 150 minor ceramic units in Morbi. The industry runs on two types of fuel: Propane-LPG and/or natural gas (PNG). Consumption of Propane-LPG is an average of 55 lakh cubic metres per day in the industry and is used by about 500 units. Propane-LPG is delivered to these units in tankers through road transport by IOCL, BPCL and HPCL, via local traders. Consumption of natural gas is approximately 25 lakh cubic metres per day and is supplied to about 150 units through pipeline by Gujarat Gujarat Gas Limited.

Despite the difficulties, not all tile units are shut in Morbi. There are 25-odd firms who invested in propane tanks along with keeping their natural gas connections active. This has allowed them to continue production, said association leaders.

Nilesh Jetpariya, owner of Kera Vitrified LLP, says, “While natural gas prices would rise in winter due to high demand in Europe, propane prices remained stable. Secondly, propane has a higher calorific value than natural gas, which means that units can increase production when using it. Also, while the cost of propane is already decided in advance and paid upfront by manufacturers to the fuel traders who purchased it from companies, the cost of natural gas would often be reflected in the bill that came every 15 days and was variable based on petrodollar.”

Speaking on the dependence of the sanitaryware units on natural gas, a factory owner said, “Sanitaryware did not move to propane because it requires an investment of Rs 60-70 lakh and return on investment (ROI) period is about four years, depending on usage and production, which is too long. Secondly, these units can absorb higher natural gas pricing to a certain extent, so they don’t need to move to propane and so they have stayed with natural gas.”

Warehouse of a tile unit in Morbi. (Express Photo)

Migrants return home

Morbi, an erstwhile princely state in the Kathiawar agency of the British Indian Empire, has a massive palace of Mani Mandir, also known as Wagh Mahal, located on the western bank of the Machchhu river that flows through the city.

Morbi, located around 66 km north of Rajkot, accounts for nearly 90 per cent of the Rs 75,000 crore ceramics market in India, with 650 major units including 540 tiles units and 110 sanitaryware factories.

The impact of the temporary closure of the industry that dominates the district is visible in the city as well. Morbi, which was upgraded to a Municipal Corporation along with eight other cities in early 2025, is otherwise teeming with migrant workers from Bihar, Uttar Pradesh, Madhya Pradesh, Jharkhand and Odisha. But with more than 70 per cent of the units having shut down, these workers have returned to their home states, leaving the streets uncharacteristically empty.

Monu Kumar from Delhi, who runs a snacks shop in the city, has shut down his shop. The big wok he used to deep fry bhajiyas in his small shop was cold, much like the kilns in the large factories.

At the Morbi railway station, a few migrant workers were waiting to catch trains heading to north and east India.

“We don’t know what exactly is happening but we were told the factory is closed and we are going home for two months or so. We are going home after a year,” said a tile unit worker from Bihar. Meanwhile, a 21-year-old youth from Jharkhand says he has worked in Morbi for only around a year. In 2025, when he first came here, his factory shut down and he had just joined another unit a couple of months ago when he was among those told to go back home while some colleagues stayed back for maintenance work.

There are about 6 lakh workers in the ceramics and allied industries like tile and sanitaryware units as well as support staff, including transport, logistics, warehousing, packaging and paper mills.

Chandan, 26, from Bihar, said he would have to catch the Azimabad Express from Ahmedabad to reach Patna, while others from Jharkhand said they would catch the Okha-Shalimar Weekly SF Express from Wankaner to reach Chakradharpur. Many workers from Odisha had left earlier in the week on the Kamakhya Express that originates in Gandhidham and stops at Morbi before heading to Assam via Bihar.

These workers, who are paid around Rs 15,000 to Rs 18,000 per month, said they had not yet received their salary from the ‘thekedars’ (job contractors) who brought them to Gujarat to work in the ceramic industry. One of them claimed that Rs 1 lakh was pending, in arrears.
Chandan, who has worked in Morbi for eight years, said his family has a wheat farm back in Bihar and that it is now time to harvest the crop.

The eldest of the other three men, all cousins from Jharkhand, at 32 years old, who requested that his name not be disclosed, said he had worked in a tiles unit for 11 years and had been one of the first to return after the Covid lockdown. About their plans when they reach, they said they will try to find work in orchards or part-time work while staying with families back home.

On the evening of March 19, even as the Dawoodi Bohras, a denomination of the Shia Muslim sect, were celebrating Eid-al-Fitr marking the end of Ramzan, neither the evening sun, nor the moon, were in sight. Instead, a dust storm blew across the city, and residents rushed to find shelter as the ceramic capital of India too received unseasonal rain.

Disasters and the way out

A small district, Morbi has witnessed many disasters. Its people are scarred by one of the worst dam disasters in the world when thousands of people were killed in the floods caused by the catastrophic failure of the Machchhu-2 dam on August 11, 1979.

More recently, another “man-made” disaster hit Morbi hard. On October 30, 2022, Jhulto Pul, a British-era cable suspension bridge collapsed, killing 135 people and injuring dozens more.

For migrant workers, who were forced to head home during the lockdown caused by the Covid pandemic, this is the second time in six years that the industry has shut down.

Facing restriction of both sources of fuel, the ceramics industry is confused with one section of leaders advocating for a move to establish common coal gasifiers once again as a buffer against external pressures on imported fuel. The other camp believes that the industry should not revert to coal but rather try a mix of attempting renewable energy like compressed biogas (CBG). They also argue that the Government of India is building infrastructure to increase strategic gas reserves.

Dharmesh Jobanputra, the largest of the Propane-LPG traders in Morbi, told The Indian Express, “Strategic gas reserves should be increased by India. We should have about 60 days of reserve to sustain all our needs, especially since Propane-LPG is essential to household use first of all and is also used in various industries.”

History of fuel use in ceramics

“Hundred percent of the fuel used in the ceramic industry is imported,” said Nilesh Jetpariya, who has two units in Morbi. But, these two fuels – Propane-LPG and natural gas —  began to be used on a large scale only two decades ago.

Jetpariya said, “Since the ceramic ecosystem was industrialised in 1984, there were tunnel kilns that used liquid fuels such as kerosene, diesel. When imported roller kilns came to Morbi, liquid fuels couldn’t be used. So the firm owners, who brought this modern machinery from Italy, began using Propane-LPG tanks by the year 2000-03.”

“In 1999, the first roller kiln came at Vrundavan Ceramic which started commercial production in the year 2000,” said a veteran industrialist.

Between 2004-06, roller kilns started becoming the industry standards, leading to rising demand for gas to power them. It was then that then chief minister Narendra Modi brought the natural gas pipeline of Gujarat Gas Ltd, to Morbi.

However, just about a year later, in 2007, an increase in the prices of Propane-LPG led to the ceramic barons installing coal gasifiers. Then, in 2011, natural gas prices shot up and so major units began leaning towards coal gasifiers, said stakeholders.

“But there was a problem. There was a lot of air pollution as well as contaminated water being released into the environment which drew the attention of social workers and the judiciary,” said a unit owner. While industrialists claim they tried to decrease the pollution of coal gasifiers caused by by-products like waste water and tar, the problem never truly ended.

From 2015 onwards, the matter of water and air pollution caused by coal gasifiers came under intense scrutiny. Early movers began adopting propane-LPG.

After the National Green Tribunal (NGT) first ordered the closure of coal gasifiers in 2019, the industry moved the Gujarat High Court but the court remained unmoved. “But when the coal gasifiers shut down, Gujarat Gas could not immediately cope up with the massive demand that came to its doors, so the industry, especially the tiles divisions, began installing propane tanks and the supply chain became more structured. Ultimately, today, 70% of the Morbi industry runs solely on Propane,” said a fuel trader who supplies Propane-LPG to Morbi.

He added, “In 2022, natural gas prices went up again due to the Russia-Ukraine war. Since then, many units have propane tanks along with natural gas pipelines.”

Share of China and Europe

According to industry leaders in Morbi, about 85% weightage of a tile manufactured in Morbi has indigenous content. Much of the machinery is imported from China (80%) while the rest comes from Europe (Spain and Italy). Replaceable parts like ceramic rollers are mostly imported from China as are the polishing abrasives.

Around 60% of the ink also comes from Europe with some contributions from China. Tile glaze is mostly made in India with some imports from Europe. Most of the raw materials including sand (silica), quartz and feldspar are locally sourced from Gujarat and Rajasthan.

The packaging boxes for the industry are made in paper mills located in Morbi itself.