India’s textile and handicraft sectors are facing severe pressure due to a shortage of natural gas and LPG. The crisis is fueled by rising costs and ongoing geopolitical tensions.
Key facts:
- Natural gas consumption in India is approximately 189 million MMSCMD, with over half being imports.
- GAIL is now heavily reliant on the spot market for gas, leading to increased production costs.
- The government issued a Natural Gas Control Order to prioritize key sectors, but industrial buyers still face supply uncertainty and high prices.
- GAIL is paying premium prices of $17-$20 MMBtu for urgent cargoes, compared to the usual spot prices of $12-$15 MMBtu.
The ongoing geopolitical tensions are impacting gas supply to India’s textile centers. The current conflict has severely disrupted global fuel trade routes, affecting India’s industrial consumers.
The government aims for 80% allocation stability for industrial consumers, but this limits production capacity. Officials have not detailed how this will affect overall production.
A source stated, “This high price indicates a significant burden on energy-intensive sectors like textiles.” Another added, “India must aggressively diversify its energy resources.”
