West Asia crisis: Ludhiana handtool export units face labour, gas supply shortages, high input costs
The crisis in West Asia is affecting export-oriented production units there; hand tool companies are facing challenges such as labor shortages, rising input costs and inadequate gas supplies, affecting production and potentially putting pressure on the country’s exports.
Other challenges they face include high interest rates, container availability, increased shipping and air freight, and high insurance costs.
However, the units are hopeful that the 15-day ceasefire between the United States and Iran will lead to an end to the conflict and help alleviate these difficulties.
The joint attack launched by the USA and Israel against Iran on February 28 seriously disrupted the country’s exports to West Asia and increased shipping freights, air transportation prices and insurance costs.
Disruptions in the movement of oil and gas from Middle Eastern countries also led to an increase in the prices of raw materials such as steel, plastic and rubber.
“Units in Punjab are facing labor shortage. Workers who went to their villages in Uttar Pradesh and Bihar for the Holi festival are yet to return and we are reaching out to them. Reverse migration is a big concern,” said SC Ralhan, President of the Federation of Indian Export Organizations (FIEO), which also owns a hand tools unit in the Ludhiana export cluster.
Workers are worried that there may be problems in supplying LPG cylinders due to the West Asian crisis.
Ralhan said the government should support companies that build housing for workers. “It would be very beneficial. Companies are taking steps, but the state’s intervention is needed,” he said.
Sanjoo Tandon, head of Eastman Cast & Forge Ltd’s hand tools unit, also said the conflict had affected exports in March.
“Freight increased significantly. Input prices such as steel, packaging material and nickel are high. Steel prices increased by 10-15 percent. In March, exports were affected by around 5-10 percent due to the war.” he said, adding that to cope with insufficient gas supply, the company used alternative fuel such as furnace oil.
“I don’t think prices will come down anytime soon,” Tandon said. He added that containers were stranded in various ports or on the high seas due to conflicts.
Around 10 percent of total hand tools exports go to the UAE, and there were no exports to the Middle East region in March.
“Dubai is also a destination for re-exports to regions such as Africa. The crisis has affected this as well,” Tandon said.
He expressed hope that if the war ends in the coming months, the movement of shipments will become smoother.
Viren Marwaha, Deputy Manager (Sales and Marketing) of DRRK Foods, a leading basmati rice exporter, said the war has halted exports to the Middle East region (UAE, Qatar and Oman), which is a major export destination for the company.
Marwaha said, “There is a huge impact on our exports in March. Transport companies do not serve that region. There is a 20-25 percent decrease in shipments.” Marwaha said, adding that they do not have a labor shortage.
Gaurav Munjal, Managing Director of Hero Ecotech Ltd, said industrial gas was not available and the company was using diesel.
“Prices of inputs like plastics and rubber have increased. Due to this, cost of production has increased 10-15 per cent,” he said, adding that prices normally increase in the summer season, but this time has gone up an additional 4-5 per cent.
Deepak Dumra, international director at garment unit Eveline, said previous US tariffs and now the war have created challenges for businesses.
“Things are tough. Orders are on hold. There is uncertainty everywhere,” he said, expressing hope that “things will calm down in the coming months.”
Released April 12, 2026
