A prolonged Middle East conflict has disrupted gas supplies to India’s industrial sector, forcing glass manufacturers in Firozabad to scale back operations and lay off workers, highlighting vulnerabilities in the country’s energy-dependent manufacturing base.

Known as India’s “Glass City” with a centuries-old tradition of glassmaking, Firozabad has seen production decline sharply as furnaces reliant on continuous high-temperature gas supply operate below capacity. Industry participants said the disruption has hit during a peak production period, compounding economic losses.

Glass furnaces require temperatures above 1,000 degrees Celsius to maintain molten consistency, making uninterrupted gas supply essential. Supply cuts exceeding 20% since early March have reduced output by about 40%, according to furnace operators, reflecting the disproportionate impact of energy shortages on production.

The disruption is linked to the ongoing conflict involving Iran, which has strained energy markets and supply chains. India’s dependence on imported gas has made its industrial base particularly exposed, with authorities prioritising household and essential usage when supplies tighten.Workers have borne the immediate impact.

At one unit that employed more than 500 workers until last month, fewer than 200 remain on payroll, according to furnace operator Somesh Yadav. Across the city, smaller workshops have shut operations temporarily as they await stable fuel availability.

The glass industry in Firozabad employs around 200,000 workers directly, according to the Uttar Pradesh Glass Manufacturers’ Syndicate, with total employment rising to approximately 500,000 when indirect roles are included. Industry officials warned that prolonged disruption could lead to widespread job losses.Rajkumar Mittal of the industry group said the continuation of current conditions could erase the production cycle for the season, which typically runs from March through August.

This period is crucial for fulfilling export orders tied to major retail cycles in Western markets.Manufacturers reported a sharp decline in output and exports. Mukesh Kumar Bansal, a local exporter supplying markets in the United States and Europe, said his factory’s production had dropped by more than one-third, with no shipments leaving in March.

Industry estimates suggest glassware exports fell by as much as 20% last month, despite earlier projections of annual growth.Logistics disruptions have compounded the crisis. India relies heavily on Gulf shipping routes, which have become costlier due to higher freight and insurance charges linked to the conflict.

Shipping a 40-foot container to Europe has risen by more than 60%, exporters said, while shipments to Gulf markets have stalled entirely.Economists have pointed to broader risks for India’s trade flows. Sonal Varma of Nomura described India as highly vulnerable to disruptions in the Strait of Hormuz, a key artery for energy and trade.

Manufacturers reported consignments stranded at ports, including Mumbai, as transport costs surged and routes were rerouted.The impact has extended beyond glassmaking. Textile exporters in Karur and manufacturers in other sectors such as machinery and auto components have also reported rising freight costs and falling shipments. Stiffenbabu Raju of Home Lines Textiles said container costs had more than tripled within weeks, forcing the suspension of exports as buyers resisted price increases.

Industry bodies estimate that about 17% of India’s more than 20 million small manufacturing and exporting units are facing sharp increases in input and logistics costs. K.E. Raghunathan of the Association of Indian Entrepreneurs said many businesses risk closure if conditions persist, with significant employment implications.State-run GAIL Gas said in a statement that supplies to Firozabad and nearby industrial areas continued under allocated volumes, with availability exceeding consumption.

The company added that some customers may have reduced offtake due to prevailing uncertainties rather than supply restrictions.The disruptions come as India seeks to raise manufacturing’s share of gross domestic product to 25% from about 17%, a target that analysts say could be challenged by prolonged energy and trade volatility.

Data from HSBC showed India’s manufacturing activity falling to a four-and-a-half-year low in March, reflecting weakening demand and supply-side constraints linked to the conflict.

Speaking to reporters in New Delhi, Agriculture and Farmers’ Welfare Minister Shivraj Singh Chouhan said India had made no concessions that would threaten staple grains, millets, fruits or dairy products, adding that farmers’ interests had been treated as “non-negotiable” during negotiations conducted under Prime Minister Narendra Modi’s leadership. His remarks were released in an official statement by the Press Information Bureau (PIB Delhi, Feb. 5, 2026).

No Market Opening That Hurts Farmers

The minister sought to allay concerns that the agreement could affect a sector that supports more than half of India’s population. He said there would be no sudden inflow of U.S. agricultural or dairy products and no market access granted in a way that could disrupt domestic producers.

According to Shri Chouhan, existing protections for food grains, horticulture produce and dairy remain fully intact, ensuring that both small and large farmers are shielded from external price pressures.

He also addressed confusion arising from comments by U.S. officials suggesting wider access for American farm goods. Shri Chouhan said these claims had already been clarified in Parliament by Commerce and Industry Minister Piyush Goyal, reiterating that India had not opened sensitive agricultural segments under the agreement.

Tariff Cuts Seen Lifting Exports

While emphasising safeguards, the government has positioned the deal as an opportunity to expand exports. Shri Chouhan said lower tariffs would help boost shipments of rice, spices and textiles, sectors where India already has a strong global presence. India’s rice exports, including to the United States, were valued at around ₹63,000 crore in recent trade data cited by the PIB.

The expected rise in textile exports could benefit millions of cotton farmers, he added, arguing that the agreement creates new demand channels rather than risks for agriculture. Government officials say this export push is central to the deal’s economic rationale.

Political Debate Continues

Opposition parties have demanded that the full details of the trade agreement be debated in Parliament. Shri Chouhan said the government would share all information in due course, but stressed that the guiding principle would not change.

“Farmers are our Annadata,” he said, using a term that refers to food providers, adding that protecting their welfare was equivalent to serving the nation.

As scrutiny of the India–US trade deal intensifies, the government’s defence underscores a broader political message: that deeper trade ties can be pursued without diluting protections for India’s vast agricultural base, which remains central to both the economy and the ruling party’s narrative.

Despite challenges arising from recent U.S. tariff increases, Indian textile manufacturers are turning the situation into an opportunity to explore new markets, improve product quality, and enhance sustainability practices that align with global standards.

In August, the United States raised tariffs on a wide range of Indian imports, including garments, jewelry, and seafood, with rates as high as 50 percent.

While this created temporary hurdles for exporters, the industry has responded proactively by focusing on diversification and innovation rather than retrenchment. Many textile exporters are now directing their efforts toward the European Union, one of India’s most promising markets for sustainable and ethically produced textiles.

According to a Mumbai-based garment exporter, diversification into the EU market has become a strategic priority. The exporter emphasized that ongoing trade negotiations between India and the European Union could pave the way for a free trade agreement, potentially unlocking vast new opportunities for Indian businesses.

Such a deal, expected to be finalized by the end of this year, would make Indian products more competitive across European markets and strengthen India’s position as a global textile hub.

The EU remains India’s largest trading partner for goods, with bilateral trade reaching $137.5 billion in the fiscal year ending March 2024—an impressive 90 percent increase over the past decade. Industry leaders believe this growth trajectory can accelerate further as Indian exporters align their production processes with Europe’s stringent standards for chemical usage, labeling, and ethical sourcing.

Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India, said that exporters are investing heavily in upgrading production facilities and adopting more sustainable methods. This includes transitioning to eco-friendly dyes, improving labor practices, and integrating advanced technologies to reduce waste.

“Indian textile manufacturers have always been known for quality and craftsmanship,” Mehta said. “Now, we are also proving our commitment to global sustainability and ethical responsibility, which will strengthen our foothold in Europe.”

The move toward Europe is not just about market expansion but also about long-term stability. By reducing dependence on the U.S. market, which accounted for nearly 29 percent of India’s $38 billion textile and apparel exports in 2025, exporters aim to create a more balanced global presence.

Companies are also leveraging digital platforms and trade exhibitions in Europe to connect with new buyers and showcase India’s evolving design sensibilities that blend tradition with innovation.

Industry veteran Vijay Kumar Agarwal, chairman of the Mumbai-based Creative Group, noted that despite short-term challenges, exporters are optimistic.

“We are using this as a turning point to innovate, diversify, and reach new markets,” he said. “India’s textile story has always been about resilience and reinvention, and this moment reaffirms that.”

Many companies are also exploring opportunities in the Middle East and Africa, regions with growing consumer demand for affordable, high-quality apparel.

Furthermore, some firms are considering joint ventures with foreign brands to establish localized production bases, ensuring competitive pricing and faster supply chains.

Experts say that these proactive steps are positioning India as a global leader not just in textile manufacturing, but also in responsible production.

The government’s continued focus on trade liberalization, export incentives, and technology upgrades through initiatives such as “Make in India” and “PM MITRA” textile parks has added further momentum to this transformation.

As global demand for sustainable fashion continues to rise, India’s textile industry is emerging stronger, more competitive, and environmentally conscious.

What initially appeared as a challenge due to higher U.S. tariffs is now becoming a catalyst for global expansion and modernization.

With Europe opening its doors wider and Indian exporters ready to meet international expectations, the sector is well on its way to achieving long-term growth.

The Indian textile industry’s response to global trade shifts highlights the country’s adaptability, creativity, and determination to lead the world in both quality and sustainability.