Times Dhandho: Gujarat short of hands that power its growth

In Morbi, ceramic manufacturer Haresh Boplaiya begins each workday by preparing lemonade for his workers to help them cope with the intense summer heat. The gesture is practical as much as personal. With temperatures soaring and the heat in kilns reaching nearly 1,200 degrees celsius, he cannot afford to lose even a single worker.

After a two-month shutdown, gas supplies to ceramic factories have resumed, and fresh orders have surged due to low market inventory. But like many manufacturers across Gujarat, Boplaiya is struggling to find enough workers to meet the demand. “We have orders, but not enough labour to execute them,” he said. “Inventory at factories and trader warehouses has nearly exhausted, and demand for tiles is strong. But skilled labour remains in short supply.”

Workforce shortage has become a common concern across Gujarat’s industrial centres. Manufacturing units in Morbi and Rajkot — spanning ceramics, engineering, chemicals and textiles — are operating with just 50% to 70% of their required workforce. Construction activity in Ahmedabad too has slowed significantly, with developers reporting project delays of up to four months.

Industry leaders say the shortage has been building for months. In Morbi’s ceramic cluster, thousands of migrant workers from Uttar Pradesh, Bihar, Odisha and Madhya Pradesh returned home after factories shut in March due to gas supply disruptions linked to the US-Iran conflict. Though units have reopened, many workers have not returned. Some stayed back for weddings and the farming season, others remain uncertain about whether factories will continue operating steadily.

According to ceramic manufacturers, many workers fear another sudden disruption could leave them stranded away from home without work.

Morbi’s ceramic industry remains heavily dependent on skilled migrant workforce, especially for kiln operations, polishing and loading. The labour crunch comes at a time of rising demand despite higher energy costs. Industry associations estimate Morbi earlier consumed nearly 70 lakh standard cubic metres (SCM) of gas daily, including about 25 lakh SCM of piped gas. After the propane disruption, Gujarat Gas increased PNG supply, taking the total daily consumption to nearly 80 lakh SCM.

Rajkot’s engineering sector is facing a similar strain.

Industrialist Brijesh Dudhagara, who operates five casting and forging units in Aji GIDC, said his workforce has dropped from around 125 workers to just 40.

“When the LPG shortage started, we arranged truckloads of cow dung and wood so workers could cook food,” Dudhagara said. “We support their families, provide schooling for their children, but rising living costs and shortages of fuel and gas have made it difficult for many workers to stay.”

Rising fuel prices have pushed up transportation costs, diesel shortages have disrupted logistics, raw material prices have increased, and imports have become costlier due to the rupee depreciating against the US dollar. Exporters are also facing pressure due to elevated shipping and container freight rates.

Industry leaders say the workforce shortage has intensified challenges by slowing output precisely when demand remains uneven but resilient.

Colonies, children’s education for construction workers

Construction activity across Ahmedabad has slowed as project sites report a 30-40% shortage of labour. Developers say timelines are being pushed back by nearly four months, while labour contractors have begun raising wages to retain workers.

According to Credai Ahmedabad, the city typically requires between 2.5 lakh and 3 lakh construction workers. For the past three months, however, the available workforce across both skilled and unskilled categories has remained significantly below the requirement.

“Almost every project is operating with fewer workers than required, and the pace of work has slowed considerably,” said a developer associated with Credai, adding that delays are becoming increasingly difficult to absorb across multiple ongoing projects.

Developers say they have been trying to retain workers through better on-site facilities. Measures include labour colonies, skill-development support, access to LPG cylinders and food distribution during periods of supply disruption. Viral Shah, secretary of Credai-Gujarat, said several builders stepped in during the LPG shortage to ensure workers stayed.

“Developers arranged cylinders and food packets,” he said. Taral Shah, chairman of the Indian Green Building Council, Ahmedabad, said timely payments and better welfare support have become critical for retention. “There has been a shortage of skilled labour over the last few months, though some workers have started returning,” he said. “Contractors are also working with NGOs to support education for workers’ children.” Developers say the shortage worsened after Holi, when many migrant workers did not return to project sites. Vikram Bharwad, director at AG Group, said workers are increasingly finding better opportunities close to home.

“Against the requirement of around 800 labourers, we are currently getting around 500,” Bharwad said. “Many workers have chosen to stay back because agriculture and local industries in their native states are providing employment.” The shortage has also pushed up wages sharply. Labour charges have risen from around Rs 500 per day to nearly Rs 700 over the past three months, developers said.

Chemical manufacturers cut output as workers choose sites close to home

Chemical manufacturers across industrial estates such as Vatva, Naroda and Odhav are also reporting production disruptions. Industry representatives estimate Ahmedabad’s nearly 700 chemical factories require around 50,000 workers, but are currently operating with a workforce shortage of at least 25%.

Munjal Jaykrishna, a chemical manufacturer in Odhav, said the inflow of migrant labour into Gujarat has slowed as states such as Rajasthan, Bihar and Odisha develop stronger industrial bases of their own. “Workers are finding opportunities closer home, which has reduced migration to Gujarat,” he said. “That has significantly affected production.”

Pigment manufacturer Amit Banthia said his factory had around 175 workers until Feb, but the shortage worsened after Holi, the wedding season and rising temperatures. “Currently, we are operating with just around 50 workers,” Banthia said. “Demand remains healthy, but production has been hit. In some cases, we are sourcing stock from the market to fulfil customer orders.” Labour costs in the sector have also increased, rising from around Rs 600 to Rs 700 a day.

Continued shortage could stretch textiles industry during festivals

Gujarat’s textiles industry too is operating with leaner staffing, though moderate demand has helped prevent a major disruption so far. Manufacturers across processing, weaving, spinning and garmenting say capacity utilisation has fallen to around 65% due to a combination of labour shortages and subdued demand.

Industry representatives say many migrant workers returned home during the vacation period and ahead of the sowing season. Rising food costs, LPG shortages and uncertainty around industrial activity have further contributed to workers staying away. “A large part of the workforce comes from northern and northeastern states, and many workers have gone back to their native places,” said Rahul Mehta, chief mentor at the Clothing Manufacturers’ Association of India (CMAI).

“Processing houses, weaving units and garment manufacturers are operating at nearly 65% capacity. Production is continuing, but factories are managing with smaller workforce and staggered shifts.”

Manufacturers say production losses remain manageable for now because demand is moderate. But if labour shortages continue into the festival production cycle, pressure across the textile value chain could rise sharply.

Gujarat’s industrial economy is confronting the same challenge: demand may be returning, but workers are not — at least not in sufficient numbers. Until labour availability improves, construction sites and processing units across the state are likely to operate below capacity.

Nearly 50% of the labour workforce has returned home in the past two months fearing a lockdown-like situation. We have orders, but the workforce shortage is delaying deliveries

Narendra Pachani

President, Rajkot Engineering Association

Industry is facing a workforce crisis. Linking rural employment schemes with MSMEs can address both labour shortages in industry and unemployment in rural areas

Parth Ganatra

President, RCCI

Every project is facing 30-40% labour shortage. We are trying our best to retain workers by providing accommodation, skill-development support, education for their children and LPG cylinders

Alap Patel

President, CREDAI Ahmedabad

Capacity utilisation in textile units has fallen due to workforce shortage. Demand is manageable now. Meeting production targets could get difficult when demand rises in coming months

Rahul Mehta

Chief mentor, CMAI

Workforce availability has dropped by nearly 40% in three months. Heat and raw material shortages have slowed operations. Many units are running only five days a week

Naresh Sharma

Former vice-president, ATMA