Gujarat’s Morbi, the world’s second-largest ceramic tile manufacturing hub employing over four lakh people, is staring down a potential industrial shutdown as the widening US-Israel-Iran war chokes natural gas supplies from the Gulf.
Manoj Arvadiya, President of the Morbi Ceramic Manufacturers Association, confirmed on 4 March that ceramic units in the town have been hit by a shortage of natural gas amid the ongoing conflict in West Asia. Gujarat Gas has formally cut its daily gas supply to industrial customers by 50 per cent, effective 6 March, with the curtailment set to remain in place until at least 31 March 2026, with the possibility of extension depending on supply conditions.
The Indian government, meanwhile, sought to reassure the public on 4 March, stating that the country holds roughly eight weeks of crude oil and petroleum inventory, including strategic reserves. Industry voices, however, warn that broad national assurances offer little comfort to a factory town whose survival depends on a gas pipeline that now runs through a war
A Complete Barricade
Morbi is home to over 600 ceramic manufacturing units, forming one of the largest clusters of its kind in the world, directly and indirectly employing more than four lakh people, including transporters, traders, packaging units, and a vast web of ancillary businesses.
The industry runs its kilns almost entirely on propane and piped natural gas, both of which flow from the Gulf Cooperation Council (GCC) countries. That supply chain is now effectively severed. Speaking to ANI, Arvadiya was blunt: “Currently, all vessels passing through are being stopped at an area controlled by Iran.
A complete barricade has been erected there. The area has been completely blocked. Because of this, vessels carrying petroleum products and gas are unable to reach the region. Therefore, there is a gas shortage here. If the gas supply is not adequate, we anticipate that the entire Morbi Ceramic Industry will have to be shut down.”
Adding to manufacturers’ alarm, spot LNG prices, quoted at $30 per million British thermal units, are three times what buyers were paying as recently as early February. Industrialist Manibhai Bavarva summed up the mood on the factory floor: “Our entire fuel chain depends on the Gulf. If supplies are not restored to normal levels, several units may be forced to shut operations.”
From Operation Epic Fury to Empty Pipelines
The crisis traces its immediate origins to 28 February 2026, when a series of coordinated US-Israeli strikes, dubbed “Operation Epic Fury”, targeted Iranian military command centres, air-defence systems, missile sites, and key infrastructure, including the assassination of Iran’s Supreme Leader Ali Khamenei. Iran retaliated by launching ballistic missiles and drones at US assets and allies across the region, including Israel, Bahrain, Kuwait, Qatar, Saudi Arabia, the UAE, and Jordan, widening the conflict significantly.
By 1 and 2 March, no ships appeared in the strait. Major container shipping companies, including Maersk and Hapag-Lloyd, suspended transits. Vessel traffic dropped first by approximately 70 per cent, before falling to near zero. Qatar subsequently paused LNG production following Iranian drone strikes on its facilities, reducing near-term global supply by almost a fifth.
The economic blow was swift and severe: European natural gas benchmark TTF futures surged 35 per cent on 3 March, rising to over 60 euros per megawatt-hour, roughly 76 per cent higher on the week. For India specifically, the exposure is acute: over half of India’s LNG imports are Gulf-linked, with Qatar and the UAE accounting for 53 per cent of India’s LNG supply, creating what analysts describe as a dual physical and financial shock.
Closer to home, LNG storage across India’s eight import terminals stands at only about 30 per cent of capacity raising fears that, without fresh arrivals, pipeline pressure could fall dangerously low, risking a grid collapse. The trouble for Morbi had reportedly begun even before the strikes, when operations at a Saudi port were disrupted last month signalling how the region’s vulnerability had been building long before the first missile was fired.
The Logical Indian’s Perspective
The crisis engulfing Morbi’s kilns is a human story as much as an economic one. A story of daily-wage workers, small factory owners, and truck drivers whose livelihoods have been held hostage by a war fought thousands of kilometres away, in which India had no hand.
It is painfully ironic that just months ago, in January 2026, the Gujarat government was handing Morbi’s manufacturers a gas price cut as relief from energy costs and today, those very units cannot get gas at any price. The government’s assurance of eight weeks of strategic reserves, while technically accurate, speaks to a macro picture that does little for the micro reality of a factory owner in Morbi deciding whether to turn off the kiln this week.
This is the moment for the Central and Gujarat state governments to step forward with targeted, transparent contingency plans not platitudes including emergency alternative fuel arrangements, direct support for affected workers, and accelerated diplomacy through every available channel. More broadly, this crisis must rekindle India’s long-overdue national conversation about energy diversification.
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