Morbi's Ceramic Industry Hit Hard by Gas Shortages, Freight Rate Hikes

Morbi's ceramic industry is facing significant challenges due to multiple factors affecting its exports. The sector, which accounts for nearly 90% of India's total ceramic production and over 85% of its ceramic exports, has seen a decline in exports by around 70% in the first quarter of the 2026-27 financial year compared to the corresponding period last year.

According to official figures, exports declined from Rs 5,200 crore between April and June 2025 to Rs 1,700 crore during April-June 2026. The crisis was largely triggered by circumstances beyond the industry's control, including the US-Israel conflict with Iran and the subsequent disruption around the Strait of Hormuz.

The shortage of natural gas and propane gas severely affected Morbi's ceramic industry, as gas accounts for nearly 40% of the total production cost of ceramic tiles. Prior to the West Asia crisis, the average gas price for Morbi's ceramic industry was around Rs 48 per SCM. However, with the disruption in supplies, prices surged to as high as Rs 90 per SCM.

Additionally, freight rates increased by 200-300%, and there was a shortage of containers, further affecting exports. Manoj Unghrejiya, a leading ceramic exporter, attributed the decline in exports to multiple reasons including the high cost of gas, freight rate increases, and container shortages.