Ahmedabad: Industrial units in Ahmedabad's chemical and textile clusters are grappling with a sharp rise in input costs after gas companies curtailed supplies to industrial consumers amid the ongoing Israel-Iran war. The disruption has led to lower production, tighter availability of key raw materials and a cascading increase in prices across the value chain, industry representatives said.

Chemical manufacturers said they are currently receiving only 40% of their gas requirement, forcing several units to operate at reduced capacity. The curtailed output has pushed up prices of basic chemicals and intermediates by 30-40% compared to a fortnight ago.

Ankit Patel, former president of the Vatva Industry Association, said the reduced gas supply has severely affected chemical production. "We have seen a huge price rise in various products like coal, sulphuric acid and phthalic anhydride. This has pushed up overall production costs. We are able to pass on some of the impact to our dyes buyers, but margins have shrunk significantly," he said.

The price rise has also spilled over into colour chemicals used by textile processors, increasing costs for processing units.

Several textile processing units have already revised their job-work rates for new orders from Monday, industry sources said.

Textile processors, particularly in the Narol cluster, are also facing pressure from rising fuel costs. Industry sources said most units in Narol rely on imported coal and lignite, making them vulnerable to fluctuations in global fuel prices. Fuel typically accounts for about 25% of the total production cost for many processing units.

A director of a leading processing unit said imported coal prices have surged sharply in recent weeks. "In the last 15 days, prices of imported coal have increased by an average of 30% depending on the quality, which has hurt our margins badly. Indonesian coal with 4,100 GAR (Gross As Received) has crossed Rs 9,000 per tonne excluding GST Along with the 25-30% rise in colour chemical prices, this has put a huge burden on process houses he said

JK Vyas, CEO of the Narol Textile Infrastructure and Enviro Management (NTIEM), said the industry was witnessing steady demand but the surge in input costs has disrupted operations. "Textile process houses were seeing good demand during the Diwali festival period after the GST reduction, and demand has remained steady since then. However, the war has impacted the entire industry. Process houses are not able to pass on the entire burden," he said.

Gaurang Bhagat, president of Maskati Cloth Market Mahajan, said processing units have already informed traders about an increase in job-work charges. "Raw material price hikes have affected process houses and they have informed our members about an average 5% hike in job-work rates from Monday," he said.

Ahmedabad is among India's largest cotton textile processing hubs. The Narol cluster alone has around 125 processing units that together process about 2.800 million metres of fabric annually and provide direct employment to as many as 1.5 lakh people.