Of all the major ceramic tile producer countries, India has been the hardest hit by the conflict in the Middle East. Four months on, the acute phase of the crisis has passed. However, its effects could call into question some of the foundations of the Morbi district’s growth. The projected 15% drop in production and sales this year (according to Acimac/MECS estimates) will wipe out the Indian ceramic industry’s 2025 recovery following a difficult 2024.
According to MECS data, in 2025 Indian tile production climbed back to 2,452 million sq. metres, up 2.2% on 2024. Exports also grew by 7.6%, recovering part of the 2024 losses to reach 565 million sq. metres. This generated a value of approximately €2 billion, unchanged from 2024.
The growth in exports covered almost all geographical regions: Asia (+1.3%), Africa (+17%), Central and South America (+43.7%), non-EU Europe (+21.8%) and the European Union (+11.5%). The only exception was North America (-24.4%), where a 9.8% drop in US sales was compounded by a 50% slump in Mexico (down from 25 to 12.5 million sq. metres).
The blockade of the Strait of Hormuz disrupted not only Indian exports to the Middle East but also the propane and LNG supplies from the Persian Gulf on which the Morbi district was almost entirely dependent. This forced almost the entire cluster to halt production for over a month and a half between March and April. Out of nearly 800 active plants, more than 500 shut down their kilns. Companies like Simpolo, which chose to continue operating in order to fulfil their customer commitments, had to purchase propane at more than double the February prices.
Operations gradually resumed as the majority of kilns were converted from propane to piped natural gas (PNG). According to Gujarat Gas Ltd, the district’s main gas supplier, 710 units were running on PNG by the end of May. However, current conditions are profoundly different from those prior to the energy shock. Most operating costs have seen exceptional increases, particularly gas and energy. While the cost of propane doubled, PNG also suffered an 80% price hike. This is compounded by rising logistics and transport costs, which impact not only tile exports from Morbi but also the price of raw materials used in production. Overall, the increase in industrial costs borne by Morbi manufacturers is estimated at between 25% and 40%, depending on the product type and the energy setup of individual plants.
This situation is unsustainable unless these cost increases are passed on to the market. Consequently, the Morbi Ceramic Manufacturers Association announced two successive price list revisions: an initial increase of between 15% and 20% in May, followed by a further 10% to 20% hike from 1st June. As the association’s leaders confirmed, the problem is that buyers are holding back at current prices. Demand risks collapsing in both domestic and foreign markets, further complicating the recovery phase and putting margins under pressure.
Warehouses emptied during the shutdown are unlikely to be replenished quickly, as manufacturers prefer to wait for fuel prices to normalise rather than risk holding stock produced at high costs. Morbi-based companies are changing their business practices and revising their strategies. They are exploring new energy supply sources, investing in energy efficiency, and considering viable alternatives to fossil fuels.
Above all, the region’s development model – which relied heavily on high volumes and aggressive pricing fuelled by cheap imported energy – is now under intense scrutiny. A growing number of Morbi-based manufacturers are placing greater emphasis on design and quality and shifting towards higher value-added products, large formats and premium surfaces. As a result, the crisis may have accelerated a transition that was already underway, but which had previously been confined to larger, structured groups with a recognised position in international markets.
Source: Ceramic World Review (https://www.ceramicworldweb.com)