Merchant exporters Mustafa Goraiya and Manish Raj sat in their officein Morbispeaking to their clients back home and in West Asia.
This worried duo had loaded 323 shipping containers with ceramics worth Rs 18.15 crore just before the outbreak of the war on Iran at the end of February. Each container has goods worth USD 6,000 on average, they claimed.
Counting their losses, Goraiya said, “Out of the total, 90 containers came from Indian ports. We have incurred a loss of Rs 70,000 on each container, and Rs 63 lakh overall. They (the containers) are being unloaded at factories. Another 27 containers, which were to set out on March 1, had to be emptied before they could go to the port. The containers were then sent back. We incurred Rs 30,000 loss per container, and Rs 8.10 lakh overall.”
Amid the losses and factories shutting down because of gas shortage, ceramic tile exporters now also stare at war risk surcharge, which is being imposed on cargo in transit or stuck in the Gulf. They called the surcharge “disproportionate” in their petitions to the Union government.
Raj, who is a partner at KB Globex, said, “Of the remaining 233 containers currently in transit (on order), shipping lines have imposed a war risk surcharge (WRS) at the rate of USD 1,500 to USD 2,000 per container. At this rate, our total losses will climb to Rs 2.80 crore-Rs 3 crore. We have already received the notice for one container, with others to follow. We hope our customers understand our situation and pay for at least half the surcharge. If they don’t, then we cannot afford to pay the freight charges to bring them back to India.”
An email sent by a shipping line to an exporter, seen by The Indian Express, stated: “A war risk surcharge for cargo to and from the Upper Gulf, Arabian Gulf and Persian Gulf will be introduced. The dynamic situation around the Strait of Hormuz and the necessary operational adjustments are causing disruptions throughout the network, which will impact schedules and equipment supply… The war risk surcharge will be effective from March 2, 2026 until further notice.”
It also stated that WRS will be charged at the rate of USD 1,500 for standard containers and USD 3,500 for reefer containers and special equipment.
The Indian Express has also seen a letter dated March 8, wherein the ceramics industry urged Shyam Jagannathan, the director general of shipping in India, to look into the matter. The letter stated: “While the operational, security, and insurance challenges faced by carriers are appreciated, the magnitude, lack of adequate prior notice, and retrospective application of these surcharges appear disproportionate and place an unfair onus on exporters for risks beyond their control.”
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On goods stranded at ports due to lack of shipping movement and missile attacks, Goraiya said, “We have a warehouse in Dubai, UAE, where there were 20 containers awaiting clearance. Of these, 18 have been released. Meanwhile, at Jebel Ali Port (the UAE) where the other two containers were located, there was a missile attack, and the area was sealed off by the authorities. When it was finally opened, we received a “detention charge” of AED 30,000 (UAE Dirhams) or Rs 7.59 lakh. Shipping lines give containers free of charge for 14 days before they need to be returned. But in this case, we still have to pay this charge even when it was not our fault.”
Raj added, “Another 18 containers of ours that were meant for Jebel Ali Port reached Salalah Port in Oman, but we came to know about this movement only after 10 days. Also, 30 of our containers meant to reach Umm Qasr Port in Iraq on March 2 were rerouted to move around several countries. These containers first went to Dammam Port in Saudi Arabia, then to Abu Dhabi Port in the UAE yesterday, and finally to Qatar today. We don’t know where our cargo is going, and there is no indication of how it is being moved around by shipping lines due to uncertainty.”
While Deendayal Ports Authority (DPA), which operates the Kandla Port in Gujarat, issued a letter on specific waivers on ‘ground rent charges’ for West Asia-bound containers stranded at the port due to the “geopolitical disturbances”, exporters were yet to find out whether such leeway would be granted for cargo stranded at ports in the Persian Gulf.
Speaking of exemplary action taken by Sri Lanka during the Covid-19 pandemic, Goraiya said,
“During Covid, we loaded 150 containers for Sri Lanka. Then the lockdown happened, meaning several containers got stuck. The Sri Lankan government waived off not only the ‘port ground rent charges’ but also issued an order that no shipping lines would take detention charges for the containers.”
Rs5.5KCROREworth of exports in one year
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As per recent reports, India’s ceramics exports stand at approximately Rs 21,000 crore, of which the Gulf Cooperation Council (GCC) nations and others in their vicinity account for Rs 6,000 crore or roughly 25% of it.
Nilesh Jetpariya, the chairman of Panel for Ceramics at the Chemical and Allied Products Export Promotion Council (CAPEXIL), said Indian ceramic export to 21 countries in West Asia and North-East Africa between March 2025 and February 2026 stood at USD 641.7 million or Rs 5,518.64 crore (at a conversion rate of Rs 86 to the USD).
First PNG, now propane crisis & looming closure
Even before the current conflict involving Iran, the ceramic industry, which has nearly650tile and sanitaryware manufacturing units in Morbi, was hit by a shortage of piped natural gas (PNG) due to the Russia-Ukraine war backin2022. This shortage partly contributed to the manufacturers shifting to propane, which has become the primary fuel for 70% of the industry today. Now, the industry is running out of propane, all thanks to the crisis in West Asia.
With fuel prices spiking after the Strait of Hormuz—through which 20% of the global supply from the oil-rich Gulf Cooperation Council (GCC) countries flows—was blockaded by Iran and amid ships finding it difficult to traverse the waterway without coverage from insurers and assurance from the country, while almost all the 540 tiles units have shut down due to lack of Propane, the sanitaryware units, numbering 110, are also staring at possible closure from March 24.
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This is because sanitaryware-making units, which use natural gas, have had their supply curtailed to 80% of average consumption (as per the Natural Gas (Supply Regulation) Order, 2026 (Gazette notification) dated March 9, 2026).
While Gujarat chief minister Bhupendra Patel is said to have assured continued supply in a meeting with the Morbi Ceramic Manufacturers Association (MCMA) on March 10, factory owners fear that the increased rates may cut into margins, making production untenable.
So, while units using only Propane-LPG have already shut down after the Government of India asked companies to reserve it for household cooking use, and Sanitaryware units who were actively using Natural Gas have stocks till March 24, those have both connections are also facing impending suspension of production.
In a letter to Union minister for petroleum and natural gas Hardeep Singh Puri on March 12, MCMA pleaded, “The current guideline restricting PNG supply to only 80% of the average consumption of the last six months has unintentionally created a severe bottleneck for the Morbi ceramic cluster. During the past six months, a large number of ceramic units were compelled to temporarily shift to propane fuel due to challenges related to PNG pricing and supply availability. Consequently, many units recorded very low or zero PNG consumption during the base period. Under the existing allocation formula, these units are now ineligible to receive PNG supply, since their historical consumption does not meet the required benchmark. This has resulted in an unintended policy deadlock.”
They did not get relief, leading to the industry declaring a general suspension of production on March 17.
