India’s textile sector is facing a crisis due to a severe shortage of natural gas and rising costs, exacerbated by geopolitical tensions. The situation has forced GAIL (India) Limited to rely heavily on the spot market for gas, resulting in increased production expenses.
Recent reports indicate that India’s natural gas consumption stands at approximately 189 million MMSCMD, with over half of this amount being imported. The government has issued a Natural Gas Control Order aimed at prioritizing key sectors; however, industrial buyers continue to experience supply uncertainty and inflated prices.
Meanwhile, GAIL is currently paying premium prices of $17-$20 MMBtu for urgent cargoes, significantly higher than the usual spot prices of $12-$15 MMBtu. This increase in costs poses a significant burden on energy-dependent sectors like textiles.
Separately, the ongoing geopolitical tensions have severely disrupted global fuel trade routes, impacting gas supply to major textile centers in India such as Surat and Ferozepur. The conflict has created challenges for manufacturers who are struggling to maintain production levels amid these rising costs.
On another front, the government aims for an 80% allocation stability for industrial consumers in an attempt to mitigate the crisis. However, this measure limits overall production capacity and does not fully address the underlying supply issues.
Industry experts have voiced concerns regarding the long-term implications of these developments. One expert noted that “this high price indicates a significant burden on energy-dependent sectors like textiles.”
Additionally, there are calls for India to diversify its energy resources aggressively to alleviate these pressures. As one commentator stated, “India must boldly diversify its fuel sources.”
