The crisis stems from acute shortages of propane and natural gas, which are critical fuels for ceramic kilns. Fuel suppliers including Gujarat Gas and Indian Oil Corporation have significantly reduced or cut off supplies to ceramic manufacturers in Morbi, as global gas prices have soared and supply chains have been disrupted by the Strait of Hormuz blockade.
Morbi: India’s Ceramic Capital
Located in the Saurashtra region of Gujarat, Morbi has earned the title of India’s ceramic hub and is one of the world’s largest exporters of floor tiles, wall tiles, vitrified tiles and sanitary ware. The city is home to over 800 ceramic manufacturing units and exports products worth thousands of crore rupees annually to more than 150 countries.
The region’s economic engine runs almost entirely on natural gas and propane as fuel for the high-temperature kilns that fire ceramic products. Any disruption in fuel supply immediately translates into a production halt. When Middle Eastern conflicts disrupt gas supply chains, the consequences in Morbi are swift and severe.
The Scale of the Shutdown
According to industry sources and news reports from Al Jazeera and the BBC, as many as 50 to 100 ceramic manufacturing units in Morbi had shut down by late March 2026, with the number increasing through April. The situation has worsened significantly in April 2026 as the Iran war escalated and the Strait of Hormuz blockade tightened, cutting off alternative gas supplies.
Workers who had migrated from Uttar Pradesh, Bihar, Rajasthan and other states to work in Morbi’s factories are now packing up and returning home — a phenomenon that industry observers are calling “reverse migration.” Local community leaders report that thousands of workers have already left, and many more are expected to follow if production does not resume.
Economic Impact: A Covid-Scale Industrial Shock
India Today reported in April 2026 that the Iran war crisis in Gujarat’s industrial heartland is pushing the region toward a COVID-like industrial shock. Factory owners, who invested heavily in modern manufacturing equipment and took bank loans, now face the prospect of mounting liabilities with no production to service them.
The wider economic impact extends beyond the immediate production halt. Downstream industries — including packaging, logistics, export agents and retail distributors — are also being affected. Export orders that had been booked months in advance are now at risk of cancellation or delay, potentially damaging India’s reputation as a reliable ceramics supplier.
India’s energy security situation has been a topic of serious government concern. Senior officials from India’s Ministry of Petroleum and Natural Gas, Ministry of External Affairs, and Ministry of Ports, Shipping and Waterways held an inter-ministerial briefing in early April to address the implications of the West Asia crisis for India’s energy security.
India’s Dependence on Middle Eastern Energy
India imports approximately 85% of its crude oil and a significant portion of its natural gas from the Middle East and other regions via routes that pass through the Strait of Hormuz. The blockade of the Strait has not only increased oil prices but has also disrupted LNG (Liquefied Natural Gas) shipments from Qatar and other Gulf producers that India depends on for its gas-fired power plants and industrial users.
The Morbi crisis is a direct consequence of this dependence. Gas allocated to industrial users has been cut back as the government prioritizes supplies for power generation and essential services. Ceramic manufacturers, considered non-essential industrial users, have been among the first to face supply cuts.
Government Response and Demands
Ceramic industry associations in Gujarat have written to the state and central governments demanding emergency intervention. Their requests include: ensuring priority fuel supply to industrial clusters, import of alternative fuels from non-Middle Eastern suppliers, financial relief packages for affected manufacturers, and diplomatic intervention to speed up the resolution of the Iran war.
The Gujarat government has urged the Centre to take up the matter at the diplomatic level, emphasizing the economic stakes for one of India’s most important export sectors. Members of Parliament from the Saurashtra region have also raised the matter in Parliament, demanding a special economic package for Morbi.
Looking Ahead
The fortunes of Morbi’s ceramic industry are now directly tied to the outcome of the US-Iran peace talks in Islamabad. If a ceasefire agreement is reached and the Strait of Hormuz blockade is lifted, gas supplies to India could normalize within weeks. However, if the talks fail and hostilities resume, the crisis in Morbi and across India’s energy-intensive industries is likely to deepen significantly. The situation underscores how geopolitical conflicts in the Middle East can have devastating ripple effects on industries and workers halfway around the world.