Impact of War on Factory Production

The war that has broken out in West Asia is now beginning to affect factories in India as well. From large manufacturing companies to micro, small, and medium enterprises (MSMEs), many businesses are struggling significantly in terms of production. Some are facing a decline in production due to shortages of fuel and delays in raw material cargo, while others are finding it difficult even to arrange meals for their employees.

Sources in the industry say that several gas-dependent units have reduced production by up to 30 percent compared to the period before the war.

Disruptions in global shipping routes have forced ships to change their routes, leading to longer transit periods and delays in cargo deliveries. This is putting additional pressure on supply chains as well as profit margins.

Industry representatives appreciate that the government understands the situation and is actively prioritizing fuel allocation for critical sectors. Clarity regarding the allocation percentage for industrial propane/LPG and natural gas, along with assurances of regular supply, will be crucial for companies to plan and optimize their operations. Without such clarity, the impact will spread across the entire industry, and the severity will depend on how quickly these issues are resolved.

Restaurants and factory canteens have been instructed to reduce gas consumption and simplify their menus. Items that require long cooking times or heavy frying have been temporarily reduced. If the supply situation does not improve in the coming days, alternative arrangements may have to be explored.

In most cases, factory canteens have now started relying on wood, coal, and electricity as alternative fuel sources. Whether the crisis continues or not, companies are indicating that they will maintain a backup plan for fuel shortages in the future. In Delhi NCR, the Pollution Control Board has also granted a one-month exemption, allowing the temporary use of certain fuels that were previously restricted.

Along with transportation costs, the cost of producing various chemicals is also rising rapidly, in panel industry.

Considering the uncertainty surrounding inflation, there are concerns that consumer purchasing may be affected in the market. As people focus primarily on essential goods, demand for panel products may remain weak, which could force manufacturers to restrict price increases.

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