Boost in Cooking Gas Supplies Brings Hope of Curbing Labor Migration in India's Largest Textile Hub

Government Allocates 70% of Commercial LPG to Priority Sectors

On March 27, the government increased commercial LPG allocation to 70% from 50%, prioritizing textile and processing industries to ease the impact of the fuel crunch. This move aims to address the early labour migration and staffing shortages in Surat, India's largest man-made textiles hub in Gujarat.

Global Conflict and Local Disruption

The ongoing conflict involving Iran has disrupted global energy supply chains, leading to rising crude-linked costs and fuel shortages that are shaping both production and labour flows in local industrial ecosystems. This has resulted in a 20-25% increase in yarn prices and a 12-15% increase in grey fabric prices in Surat.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Seasonal Migration Disrupted

The textile industry in Surat typically experiences a seasonal outflow of migrant labour between mid-March and the end of May. However, this year's migration began earlier in March and has been more pronounced, with a larger number of workers leaving within a short span. The Nylon Spinners Association estimates that the industry is short by 25-30%.

Fuel Crunch and Supply Pressures

The LPG shortage has unfolded against a backdrop of rapidly rising input costs, driven largely by crude oil volatility linked to geopolitical tensions. The government has stated that overall fuel stocks (including LPG) are sufficient for about 60 days. The textile industry in Surat is overwhelmingly polyester-based and depends on petrochemical derivatives such as monoethylene glycol (MEG) and purified terephthalic acid (PTA).

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Industry Impact

The cost escalation has been broad-based, with nylon prices surging amid shortages, Indonesian coal up about 30%, dyes by nearly 40%, and overall processing costs rising by 15-20%. The Clothing Manufacturers Association of India (CMAI) estimates that the impact is particularly severe in Surat due to its structural dependence on energy-intensive processing.