Gas, Freight and Anti-Dumping: Morbi Ceramic Exports Collapse by 70%
Tile Wars · markets · · Tile Wars
India's ceramic hub has seen exports fall from around 510 million euros to 167 million euros in a single quarter, hit by a gas supply crisis, freight rates up 200-300% and anti-dumping duties in key markets.
Morbi, India's ceramic hub, is going through one of the toughest quarters in its recent history. Official figures show that exports fell by around 70% in the first quarter of the 2026-27 financial year compared with the same period a year earlier.
Between April and June 2025, exports were worth around 5,200 crore rupees, roughly 510 million euros. In April-June 2026 they dropped to around 1,700 crore rupees, some 167 million euros. Morbi accounts for nearly 90% of India's total ceramic production and more than 85% of its ceramic exports, so the impact is felt across the whole country.
Part of the surplus stock was absorbed by the domestic market, but several plants were forced to cut output because of the disruption.
A crisis triggered from outside the industry
The sector was performing well until the end of the previous financial year. The turning point came with the US-Israel conflict with Iran and the disruption around the Strait of Hormuz, which caused a severe shortage of natural gas and propane.
Gas represents close to 40% of the total production cost of ceramic tiles. Morbi was heavily dependent on propane: around 900 ceramic units were consuming nearly 5.5 million SCM of propane a day, on top of 2.5 to 3 million SCM of piped natural gas supplied by Gujarat Gas.
According to industry representatives, propane was cheaper than piped gas and had a calorific value around 17% higher. It was supplied to Morbi by several private and public sector companies.
From 0.47 to 0.88 euros per SCM
Before the West Asia crisis escalated, the average gas price for Morbi's ceramic industry was around 48 rupees per SCM, roughly 0.47 euros. As the crisis deepened, supplies were disrupted and many plants had to halt production for 30 to 45 days, as the government prioritised gas for domestic consumption.
Qatar was a major LNG supplier to India, and the disruption to shipping in the region severely hit availability. After nearly a month of uncertainty, Gujarat Gas managed to secure alternative and spot market supplies, but prices surged to as much as 90 rupees per SCM, around 0.88 euros. The price of piped gas later stabilised at around 79 rupees per SCM, about 0.77 euros, with the company supplying some 8.5 million SCM a day to industry.
A costly miscalculation in August
With the Strait of Hormuz reopening, propane suppliers approached Morbi manufacturers again in July offering prices below piped gas. Gujarat Gas, however, requires industrial customers to submit advance estimates of their monthly needs.
When the company asked for August volumes around 20 July, most ceramic producers did not place their requirements because they had already agreed deals with propane suppliers. As August approached, those suppliers said they could not source the gas due to the changing situation in West Asia.
Gujarat Gas had to buy additional volumes on the spot market at the last minute. It supplied gas at around 89 rupees per SCM, some 0.87 euros, to customers who had not declared their needs in advance, while those who had done so paid around 79 rupees, about 0.77 euros. Propane suppliers, meanwhile, offered gas at around 85 rupees per SCM, roughly 0.83 euros, still considered relatively cheaper in effective consumption terms because of its higher calorific value.
Freight rates multiplied by six
The uncertainty over gas and the prolonged shutdowns had a direct impact on exports. When production resumed after nearly a month, domestic demand was strong because of the tile shortage, but the same products failed to find enough buyers abroad.
"There are multiple reasons that affected exports adversely. The high cost of gas forced us to increase prices, freight rates increased by 200 to 300%, and there was also a shortage of containers," said Manoj Unghrejiya, a leading ceramic exporter.
Domestic buyers accepted the higher prices, but international markets are far more competitive. Freight rates to the UAE, previously around 300 to 400 dollars per container, some 280 to 370 euros, have recently surged to around 2,500 dollars, roughly 2,300 euros.
Anti-dumping duties of 50% to 100%
On top of that, several Gulf states, European countries and South Africa have imposed anti-dumping duties on Indian ceramic products, with rates ranging from 50% to 100%.
With higher gas and freight costs, container shortages and trade barriers in key destinations, Morbi's ceramic industry is finding it increasingly difficult to compete with China and the leading European producers in the international market.