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The fuel crisis and supply chain disruptions coupled with increase in packaging and raw material costs over the past week due to the raging conflict in West Asia have hit the industry in Haryana across all sectors.
A large number of textile, food processing, pharmaceutical and agricultural implements units in Panipat, Sonipat, and Karnal rely on liquefied petroleum gas (LPG) to run industrial boilers for dyeing, heating, and sterilisation. Most of these units are on the verge of shutting down operations, Manoj Arora, secretary, Haryana Chamber of Commerce and Industry (HCCI), told The Hindu.
“The cost of commercial LPG cylinders rose by around 20% over the past few days. It is not available since yesterday [Tuesday],” Mr. Arora said.
He recalled making several frantic calls to arrange a few commercial LPG cylinders for his industrialist friend in urgent need of the fuel to meet the deadline for an export assignment, but failed to get any.
He expressed apprehension about most industrial units in the National Capital Region (NCR) that run on LPG being forced to shut down in case supply does not improve over the next two-three days. He said almost half of the textile units in Panipat were shut for periodic maintenance, else the impact would have been wider.
‘Wider impact’
“The industry has also been adversely hit by an increase in packaging material cost. The price of petroleum-based packaging products has almost doubled since the war broke out in the Gulf region. While LPG supply may not hit all industries, the rise in the cost of packaging products will have a wider impact,” Mr. Arora said.
He added that the HCCI received calls from industrialists across Haryana, including Hisar, Bahadurgarh and Karnal, to take up the issue of non-availability of the fuel with the State and Union governments.
Around 15,000 MSMEs across automotive, garments, and footwear sectors have been impacted due to disruption in supply of LPG and CNG, said Faridabad Industrial Association president Raj Bhatia. The district is a major industrial hub in Haryana.
“Be it energy, logistics or raw materials, everything has taken a hit. It has only been 12 days since the war broke out. The real impact will be felt once the ‘safety stock’ of fuel and raw material gets exhausted,” he said.
Seeking alternatives
Mr. Bhatia said the association has sought permission from the government to use alternative fuel in view of the short supply of cleaner fuels. “In the NCR, industries must only use piped natural gas, electricity or biofuels in view of the high pollution levels. The use of coal and other polluting fuels are prohibited. We have written to the government to consider relaxation in norms and allow the use of alternative fuel in view of the looming energy crisis,” he said.
Orders put on hold
Panipat’s blanket export business, largely catering to West Asian countries and with annual turnover of worth several hundred crores of rupees, has been affected due to cancellation of orders, delay in payments, and existing orders being put on hold.
Rice exporters, too, have been hit with West Asian countries being key consumers. Panipat’s textile industry is reeling due to rise in the cost of yarn, an important raw material for the industry.
Bahadurgarh Chamber of Commerce and Industries senior vice-president Narinder Chhikara said 100 footwear units have shut down due to non-availability of commercial LPG cylinders. Around 3,000 footwear units in Bahadurgarh account for over 60% of non-leather footwear production in India. It is one of Asia’s biggest non-leather footwear manufacturing hubs.
“The cost of raw materials such as chemicals used in the footwear industry, sourced from Saudi Arabia, has gone up by 40-70% over the past few days. The supply chain has been hit severely. Even if the war ends today, it might take two months for the supply to normalise. If the conflict continues for the next 5-7 days, almost half of the units will find it difficult to continue operations,” Mr. Chhikara said.
He added that a meeting was scheduled with Chandni Chowk MP Praveen Khandelwal, also general secretary of the Confederation of All India Traders, to discuss the issues faced by the industry.
Manesar Industries Welfare Association general secretary Vikas Gupta said the war had hit every industry. “We were just recovering from the tariffs and now this. It has been a continuous struggle and nothing can be more devastating for the industry than uncertainty across all sectors,” he said.
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