The escalating conflict in West Asia is beginning to disrupt industrial operations in Gujarat’s manufacturing hubs, with factories in the Morbi region warning of potential shutdowns within the next eight to ten days due to supply chain disruptions and rising fuel costs. Local industries that rely heavily on imported raw materials and international shipping routes are facing severe uncertainty as maritime transport has been disrupted by the ongoing geopolitical tensions. Industrialists say the situation highlights how global conflicts can quickly ripple through local economies and threaten critical manufacturing clusters in India.

The paper manufacturing sector in Morbi is among the first to feel the impact. Paper mills in the region depend largely on imported waste paper as their primary raw material, but shipments that usually arrive through ports have been abruptly halted because of disruptions in international shipping routes linked to the conflict. The sudden shortage has led to a sharp spike in prices, with containers of waste paper rising from around $3,600 earlier to nearly $5,600. Industry representatives say the surge in costs is squeezing already thin margins and making it increasingly difficult for mills to maintain operations.

According to Shailesh Patel, the situation has pushed the industry into a severe operational crisis. The Morbi region currently hosts about 75 paper mills, but only 54 of them are operational at present. Patel warned that if the supply of imported waste paper does not resume soon, even the functioning units may have to halt production. The sector also faces mounting pressure from rising fuel costs, which are adding to the financial burden on manufacturers already struggling with raw material shortages.

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Coal, a critical fuel for boilers used in paper manufacturing, has also become significantly more expensive as global shipping disruptions affect supply. Paper mill owner Baldev Patel said coal prices that earlier ranged between ₹5,500 and ₹7,000 per tonne have climbed to around ₹6,500 to ₹8,000 per tonne. He warned that if the supply situation worsens and coal becomes unavailable, mills may be forced to shut down their boilers even if raw materials are available, bringing production to a complete halt.

The crisis is also spreading to Morbi’s much larger ceramic manufacturing industry, widely considered the ceramic hub of Gujarat. The region hosts nearly 600 ceramic units that rely on propane gas and natural gas to fuel their kilns. However, propane supplies have been disrupted due to the same geopolitical tensions affecting global shipping. Industry sources say agencies have stopped accepting new propane orders in recent days, and the filling of propane tankers at Kandla Port has also been suspended.

Local industrialist Bharat Bhai warned that if the situation persists, the region could face a large-scale industrial shutdown within days. The potential fallout extends beyond the core industries themselves, as Morbi’s paper mills supply packaging materials to ceramic manufacturers, while numerous ancillary businesses — including transporters, packaging firms and engineering workshops — depend on the ceramic sector. Export-driven industries in Gujarat’s Surat, including textiles, diamonds and jewellery, are also feeling the pressure, with exporters warning that prolonged disruption could lead to payment defaults and declining overseas orders.

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