Some small ceramic and tile makers in India have temporarily shut down operations due to gas supply disruptions.
Natural gas and propane are key fuels for tile manufacturing, and India relies heavily on West Asia for its natural gas imports.
Industry leaders warn that the situation could worsen if supply restrictions continue.
Some small ceramic and tile makers in India have temporarily shut down operations due to disruption in gas supply triggered by the conflict in West Asia. Natural gas and propane gas are the main fuels for tile makers and India depends on West Asia for a majority of its natural gas imports. Industry leaders and experts note that if the supply restrictions continue, the situation could become dire.
About 40% (9.5–10 mmtpa) of India’s liquefied natural gas (LNG) comes from Qatar. This constitutes about 20% of India’s natural gas demand.
2 March 2026
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Manoj Arvadiya, president of the Gujarat-based Morbi Ceramic Association, told Outlook Business that some plants that did not have natural gas stock have temporarily shut down operations, though he did not provide a number. Morbi district in Gujarat is a major cluster for ceramic and tile production, with around 1,200 ceramic units and an annual production of approximately 60 lakh tonnes.
It accounts for approximately 80 to 90% of India’s total ceramic exports and employs about 9 lakh people directly and indirectly.
"The impact for now is temporary; it is not at the verge of a total shutdown. Some plants that did not have natural gas stock have temporarily shut down operations. If the supply does not improve in a month, other plants will be forced to close step by step," Arvadiya said.
Last week, Somany Ceramics Limited, one of the largest listed tile makers, informed stock exchanges that its Kadi plant in Gujarat’s Mehsana district will be impacted due to Sabarmati Gas Limited (SGL) restricting supply to 50% of the contracted quantity.
Later, its Ahmedabad-based peer Asian Granito India Limited also told investors that it may face limitations of gas supply and restrictions on the usage of non-MGO gas until further notice.
"Company and its subsidiaries have received a communication from Gujarat Gas Limited (GGL) and Sabarmati Gas Limited (SGL) regarding restriction/limitation in the supply of gas due to a force majeure situation arising from the ongoing conflict in the Middle East and its consequent impact on global energy markets," Asian Granito said.
What's causing the Gas supply disruption?
Following Iran's strike on an LNG production facility last week, the world's largest liquefied natural gas (LNG) company, QatarGas, halted production. The plant is Qatar’s largest and handles about 82 million tonnes per annum (mtpa) of LNG, roughly 25% of global LNG supply.
Following the announcement, on March 5, Indian state gas supplier GAIL said that its LNG supply had been reduced to zero.
A day later, Gujarat Gas, one of the main suppliers to ceramic plants in Morbi, announced that it was issuing force majeure notices to its industrial customers.
According to ICRA, power and fuel costs constitute 22–25% of total production costs for the ceramic industry, with coal and natural gas accounting for 40–60% of this component. Its report on Tuesday noted that any substantial change in fuel price trends hits operating margins.
"This has forced many small players to shut operations. Larger players, however, can manage for the next 2–3 months through existing inventory and contracted gas arrangements. If the conflict drags on, revenues and operating margins of all the players will be impacted," analysts at the rating agency said.
According to Arvadiya, the Gujarat government has assured the industry that it will find an alternative gas supply. However, on Monday the Union government issued a gazette notification to regulate the supply, distribution and trade of petroleum products to ensure equitable distribution.
It put domestic piped natural gas (PNG), compressed natural gas (CNG) for transport, liquefied petroleum gas (LPG) production, including shrinkage requirements and pipeline compressor fuel and other essential operational requirements at the top of the allocation list. These will receive 100% of their average gas consumption over the past six months.
Industrial and commercial consumers served by city gas distribution (CGD) companies, which likely includes the ceramic industry, have been placed at the last priority and will receive 80% of their average gas consumption during the same period.
According to ICRA, the operational disruption comes at a time when Indian ceramic exports to West Asia have been on a downward trajectory over the past five years due to anti-dumping duties by the Gulf Cooperation Council and customs duties levied by the Saudi Arabia.
"Tile exports to West Asia account for a notable portion of Indian ceramic exports,” the report said, adding that with the ongoing US-Iran conflict would further lower exports to the region, impacting revenues of Indian tile exporters and might lead to continued oversupply risks in the domestic market.
