Iran war forces job losses, reverse migration in India’s ceramic hub
The ceramics industry in Gujarat’s Morbi, long recognised as the world’s second-largest tile manufacturing cluster, has been brought to a near-standstill by the escalating conflict in West Asia. Fuel shortages triggered by disruptions to propane and natural gas shipments from the Middle East have compelled over 400 ceramic units to suspend operations, according to industry reports. The crisis, which intensified in early 2026, has not only halted production but as well triggered widespread job losses and prompted a reverse migration of skilled labourers back to their home states, disrupting livelihoods across Gujarat’s vital industrial corridor.
The situation has drawn sharp concern from trade bodies and economists, who warn that the prolonged shutdown could inflict deeper damage than the COVID-19 pandemic on the region’s ₹650 billion ($7 billion) ceramics and tiles sector. With exports to the Middle East—normally accounting for about a quarter of Morbi’s 30,000 monthly export containers—now completely blocked, manufacturers face mounting financial pressure. Industry leaders have stated that restarting operations without assured fuel supplies is economically unviable, leaving thousands of workers in limbo as savings dwindle and local economies feel the strain.
Hitesh Detroja, chief of Lexus Granito, told Reuters that the current crisis “could possibly be worse than the COVID-19 period for the industry,” underscoring the severity of the downturn. Similarly, Manoj Arvadiya, president of the Morbi Ceramic Association, warned that if fuel supplies do not improve, all ceramic units in Morbi would observe a collective shutdown after March 15, 2026. These assessments reflect growing anxiety over the sustainability of operations amid prolonged geopolitical instability.
The fuel crisis has directly impacted production processes, as Morbi’s kilns rely heavily on propane and natural gas to fire tiles, sanitary ware, and other ceramic products. Reports indicate that many units using propane have already shut down or are close to doing so, while those dependent on natural gas have begun receiving force majeure notices from suppliers, forcing production suspensions. To retain workers during the stoppage, some factories have arranged on-site food and lodging—a temporary measure that underscores the human cost of the industrial freeze.
Beyond the factory gates, the crisis has triggered a notable reverse migration, with skilled labourers from states such as Uttar Pradesh, Bihar, and Rajasthan returning home as wages cease and job security evaporates. This movement reverses years of inward migration that had transformed Morbi into a bustling industrial hub employing hundreds of thousands. Local businesses dependent on worker spending—ranging from food vendors to rental accommodations—are now experiencing reduced demand, amplifying the economic ripple effects across the region.
Tile prices have already begun to reflect the supply constraints, increasing by ₹2–3 per square foot in local markets, according to ground-level reports from industry analysts. While this offers little relief to struggling manufacturers, it highlights how upstream disruptions are translating into tangible market pressures. Exporters, meanwhile, face a dual blow: not only are they unable to operate kilns, but they cannot ship finished goods to traditional West Asian markets, which have long absorbed a significant portion of Morbi’s output.
Asian Granito, a major tiles and bathware maker, disclosed in a regulatory filing that it is evaluating alternative fuels and operational measures to mitigate the impact. Although, industry officials stress that such adaptations are limited in scope and cannot compensate for the systemic loss of reliable fuel access. The absence of a clear resolution timeline has left the sector in a state of suspended animation, with workers and employers alike awaiting signals of de-escalation in the broader Middle East conflict.
The crisis in Morbi serves as a stark reminder of how deeply interconnected global supply chains are with regional stability. What began as a fuel supply issue has evolved into a socioeconomic challenge, threatening not just industrial output but also the social fabric of communities built around the ceramics trade. For now, the kilns of Morbi remain cold, their future tied to developments far beyond Gujarat’s borders—where peace, or the lack of it, will determine whether the wheels of industry turn again.
As of April 21, 2026, no official date has been set for the resumption of full-scale operations in Morbi’s ceramic cluster. Workers and industry bodies continue to monitor fuel supply developments and diplomatic updates related to the West Asia conflict, with the next key checkpoint being any improvement in fuel shipments or a formal extension of the March 15 shutdown deadline by the Morbi Ceramic Association. Readers are encouraged to follow verified updates from official industry sources and trusted news outlets for developments on this evolving situation.
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