Key facts
- Morbi's ceramic industry, which accounts for 90% of India's ceramic production, has largely restarted operations.
- The industry faced a two-month shutdown from March to April due to the Iran war and fuel supply disruptions.
- Production costs have risen by an average of 80%, leading to higher wholesale prices for tiles.
- Exports were significantly impacted, nearly halving.
- Increased domestic demand is helping to offset export losses, generating an estimated ₹1,000 crore extra monthly turnover.
Morbi, a major ceramic manufacturing hub in Gujarat, has seen its factories resume operations after a two-month hiatus caused by the Iran war and subsequent natural gas supply disruptions. The conflict led to a complete shutdown of nearly all 750 units between March and April, forcing approximately 400,000 workers to leave the region.
The resumption of piped natural gas (PNG) and propane supplies has allowed most factories to restart. However, the war has significantly driven up production costs, with an average increase of 80%. This has resulted in higher prices for GVT, vitrified, and wall tiles, with wholesale prices for wall tiles rising to ₹180 from ₹130 per unit.
Exports, which constitute about ₹20,000 crore of the industry's ₹60,000 crore annual turnover, were nearly halved. Fortunately, the domestic market has emerged as a critical support, with demand surging due to depleted stocks among dealers and consumers. This has led to an estimated extra monthly turnover of ₹1,000 crore from domestic sales, partially compensating for export losses.
Morbi accounts for approximately 90% of India's total ceramic production and contributes 13-18% to global demand, exporting to over 180 countries. While the easing of the Iran-US conflict brings relief, industry stakeholders are cautiously awaiting further clarity on the long-term implications.