Natural Gas Crisis Hits India’s Textile Sector
India’s textile sector is facing a crisis due to a severe shortage of natural gas and rising costs, exacerbated by geopolitical tensions. Manufacturers in Surat and Ferozepur report that the situation has become dire.
According to GAIL (India) Limited, the country consumes approximately 189 million MMSCMD of natural gas, with over half of that being imported. The ongoing geopolitical tensions have severely impacted gas supply routes, causing significant disruptions.
The government has issued a Natural Gas Control Order aimed at prioritizing key sectors. However, industrial buyers still face uncertainty regarding supply and inflated prices. GAIL now relies heavily on the spot market for gas, leading to increased production costs.
Currently, GAIL pays premium prices ranging from $17-$20 MMBtu for urgent cargoes, compared to the usual spot prices of $12-$15 MMBtu. This price hike places an enormous burden on energy-dependent sectors like textiles.
The textile industry, which is vital for employment in regions like Surat, is particularly hard-hit. One manufacturer noted, “The rising prices are making it nearly impossible for us to maintain our production levels.” Another added, “This high cost indicates a significant burden for energy-intensive sectors like textiles.”
The government aims for 80% allocation stability for industrial consumers, but this strategy limits production capacity. As a result, many manufacturers worry about their ability to fulfill orders.
The conflict affecting global fuel trade routes has intensified these challenges. With about 60% of India’s natural gas imports passing through the Hormuz Strait, any disruption there can have immediate repercussions.
In light of these issues, experts suggest that India must diversify its energy resources aggressively. One analyst remarked, “India needs to boldly diversify its fuel sources to mitigate these risks going forward.” The urgency for solutions is clear as manufacturers brace for an uncertain future.
