AHMEDABAD: With the West Asia war ending, Gujarat’s industrial sector is left grappling with its aftermath, as the government officially stated that 1,212 industries have shut due to sustainability issues, while approximately 28,517 are operating at reduced capacity.
What began as a distant geopolitical conflict turned into a direct economic shockwave, and its aftershocks have torn through Gujarat’s industrial ecosystem, exposing cracks that the state government appears reluctant to acknowledge.
As tensions between Israel, the United States and Iran escalated during the conflict, the flames of war not only engulfed the Gulf but also scorched Gujarat’s once-thriving factories, leaving behind closures, stalled production and a deepening crisis.
Official data released by the state government attempts to frame the damage in controlled terms, stating that out of 4,11,733 registered industries, 1,212 have “closed due to sustainability issues” while 28,517 are operating only partially.
Yet, beneath these sanitised figures lies a harsher reality: industries are not merely “adjusting”; they are collapsing under pressure, and industrialists insist the trigger was not abstract economics but a very real and immediate disruption in gas supply and skyrocketing input costs.
The government, however, has drawn a firm line, asserting in its press note that closures, especially in Morbi, are driven by “economic constraints, not gas shortages”, while simultaneously claiming that no major retrenchment has occurred.
This official stance, polished and procedural, sharply contrasts with voices from the ground that paint a far more alarming picture.
Mahendra Ramoliya, a veteran industrialist and director of Sachin GIDC associated with Surat’s textile hub for over three decades, cuts through the official narrative with blunt urgency, stating, “The first and direct impact of the Middle East situation has been on gas supply, there simply isn’t enough. Without gas, operations stall, and without work, labourers flee. Demand has collapsed completely, whether for unfinished or finished goods, and the industry today is almost frozen.” His words do not just describe a slowdown; they signal paralysis.
He further exposes the scale of the collapse with staggering numbers: “Before the war, Surat produced 60 million metres of polyester fabric daily; today that has plunged to just 1.5 million. Production has fallen by 70 to 80 per cent, and only 25 to 30 per cent of workers remain. After salaries are paid this month, the rest of the workers will leave. If this continues, the government will have no option but to step in with a financial package and relief on bank loans.” Each figure underscores not just decline, but systemic breakdown.
The ripple effects spread across sectors with speed. In Morbi’s ceramic industry, over 400 factories have already shut, allegedly crushed under gas cuts and inflated costs. In Surat, textile processing units that once thrived on scale have been reduced to single-shift operations.
The diamond industry, heavily dependent on global demand, is witnessing a steep export slump. Meanwhile, the hotel and catering sector is struggling to survive, choked by a shortage of commercial gas.
Sanjay Bhai, a textile unit owner in Surat, offers a ground-level account that exposes how policy decisions compounded the crisis. “The moment piped gas stopped, everything began to unravel. Then came the ban on commercial gas, and workers, especially migrants, had no choice but to leave. They don’t have official connections or the money to buy gas at inflated black-market rates. In just 10 to 15 days, 50 to 60 per cent of workers have left Surat,” he reveals, highlighting a silent exodus that official reports failed to capture.
He connects the crisis directly to global price shocks, adding, “Textiles are tied to crude oil, and when crude prices surged, fabric prices jumped from ₹200 to ₹250–300. Buyers stepped back instantly, demand vanished, and production had to stop. At that point, whether workers stayed or not, the industry was bound to shut down.”
His statement lays bare a chain reaction, fuel crisis to price surge to demand collapse to industrial shutdown.
Behind these numbers are livelihoods, over 20 lakh workers in Gujarat’s manufacturing sector now caught in a tightening grip of uncertainty. Many have already returned to their hometowns, stranded between joblessness and inadequate relief.
The government claims it has provided meals to 50,000 workers through 159 industrial kitchens, but in the face of millions affected, this relief appears insufficient, mere tokenism against a swelling humanitarian challenge.
In its defence, the government points to a series of coordinated measures with the Centre, including prioritising fuel supply to key sectors, rationalising industrial gas distribution, and allowing temporary use of alternative fuels such as coal, kerosene and biomass.
It emphasises regulatory and administrative steps taken to “mitigate disruption”, but on the ground, these measures appear unable to match the speed or scale of the crisis.
While policies are being reviewed in the aftermath of the war, factories remain shut, workers have left, production has collapsed, and the gap between official claims and industrial reality continues to persist.