Morbi’s ceramic tiles industry is staring at a grim future again as high container freight rates and elevated gas and propane prices continue to hit an industry that is yet to recover from the disruption it faced during the geopolitical conflict between the USA and Iran.
The pressure comes at a time when the industry is already struggling with weak exports. Exports from the Morbi cluster fell 70% in the first quarter of the financial year, adding to concerns over the industry’s ability to absorb higher logistics and energy costs. The cluster, second largest after Guangdong in China and having over 900 units, had shut production for more than a month during the Hormuz crisis earlier this year.
In the corresponding period in 2025, the exports stood at around Rs 5,200 crore. Morbi, known as India’s ceramic hub, accounts for nearly 90% of the country’s total ceramic production and more than 85% of its ceramic exports. The annual turnover of the industry is about Rs 50,000 crore to Rs 70,000 crore.
Container Rates Quadruple
Manoj Arvadiya, president of the vitrified tiles division of the Morbi Ceramic Manufacturers Association, told FE that with the hike in container freight charges and gas and propane, the industry will be able to survive a maximum of two months. “If the prices do not come down, then they will have shut factories gradually. There is also a fear that the exports will drop down further by 10%,” he said.
The prices for the container that were around US $ 800 before geopolitical tensions began are now between US $ 3,000-5,000, he pointed out. “Our business has gone to China, Turkey, and South Africa due to cost-effectiveness. A few days ago, a client in Poland told me that they are getting the containers at US $ 2,400 vis-a-vis our price of US $ 5,000,” Arvadiya, also the founder and chairman of Bluezone Group, said. “Maybe the countries supplying products have their own shipping lines,” he remarked.
Escalating Fuel Costs
The industry is also facing the additional challenge of anti-dumping duties. Several Gulf nations, European countries, and South Africa have imposed anti-dumping duties on Indian ceramic products, pointed out Nilesh Jetpariya, chairman of the Ceramic and Allied Products Export Promotion Council.
Even now, propane is in short supply, and the prices are high. Gujarat Gas is ready to supply gas, but the demands have to be conveyed a month in advance, and here as well the rates are high, he said. Ever since March 1, the natural gas prices have almost doubled, and the price of propane has also gone up by 40%. As per conservative estimates, the industry uses 50 lakh standard cubic meters (SCM) of propane and about 30 lakh SCM of natural gas daily.
Both Arvadiya and Jetpariya stressed the need for having India’s own shipping lines to reduce dependence on foreign carriers and bring greater stability to freight rates. But setting up such capacity could take three to four years, they said.
As there was a short supply in the domestic market, the industry witnessed good demand when it reopened after a month-long break. “Foreign buyers are not ordering due to the rise in prices. The market is struggling,” Arvadiya said.
For the time being there is no problem for the workers, but the margins of the factory owners are squeezing, and in some instances they crack the deals even on a wafer-thin margin.