From textiles to chemicals, Gujarat’s import-export in turmoil amid Israel-Iran conflict

The escalating tensions between Iran and Israel-America has rung the alarm bell for Gujarat’s economy and tourism sector. If this conflict continues for a long time, as many as 10 major industries in the state will face recession and tour operators will face a blow of about ₹50 crore.

Impact on the industrial sector

Industrial hubs like Surat, Ahmedabad, Morbi and Jamnagar are likely to be hit hard due to the global instability.

Agriculture and Textiles: Prices in the local market are likely to fall as exports of castor oil, groundnut and cotton to Arab countries are halted. Surat’s textile industry, which exports heavily to Middle Eastern countries, will be directly hit.

Ceramics and Chemicals: Morbi’s ceramic industry depends on the ‘Strait of Hormuz’ for gas supply; production will be disrupted if this route is closed. Similarly, as crude oil becomes more expensive, the prices of raw materials will increase in the petrochemicals industry of Bharuch and Dahej.

Diamonds and Pharma: Demand for jewellery will decrease in Europe-America and there will be a local recession due to rising gold prices. As the import of ‘Active Pharmaceutical Ingredients’ (API) in the pharma sector becomes more expensive, the production cost of medicines will increase.

Logistics: The global supply chain has been disrupted as transportation through Kandla, Mundra and Pipavav ports has been affected.

Tourism and the situation of stranded Gujaratis

The tourism industry is facing a crisis with cancellation of international flights due to the war, not to mention the mounting financial losses. If the war continues for another 15 days, tour operators may lose ₹50 crore. Currently, pressure is increasing on agencies for refunds and booking cancellations.

Tourists stranded abroad: Approximately 3000 Gujaratis are stranded in Dubai, Sharjah and Abu Dhabi. It is a challenge for the government to bring back these tourists who had gone on Holi vacation.

Team of doctors in Oman: As many as 44 Gujaratis, including Ahmedabad Medical Association president Jignesh Shah and 10 doctors, are stranded in Oman. They were supposed to return on March 4, but now they are likely to return by March 5.