India’s textile sector is grappling with a significant crisis as it faces a severe shortage of natural gas and rising costs, exacerbated by ongoing geopolitical tensions. The situation has reached a critical point as of May 3, 2026, affecting manufacturers across the country.
Documents show that India’s textile and handicraft sectors are experiencing immense pressure due to this natural gas scarcity. GAIL (India) Limited, the country’s leading gas distributor, has reportedly become heavily reliant on the spot market for gas purchases, which has resulted in increased production costs for manufacturers.
The government has attempted to address the issue by issuing a Natural Gas Control Order aimed at prioritizing key sectors. However, industrial buyers continue to face supply uncertainty and inflated prices. As sources indicate, natural gas consumption in India stands at approximately 189 million MMSCMD, with over half of this volume being imported.
Furthermore, the ongoing geopolitical tensions have severely disrupted gas supply to critical textile centers such as Surat and Ferozepur. This disruption has forced GAIL to pay premium prices ranging from $17-$20 MMBtu for urgent cargoes, significantly higher than the usual spot prices of $12-$15 MMBtu.
The current conflict has not only impacted natural gas supply but also disrupted global fuel trade routes, further complicating the situation for India’s industrial consumers. The government aims for an allocation stability target of 80% for industrial consumers; however, this still limits production capacity across various sectors.
Industry experts have raised concerns about the ramifications of these developments. One source remarked that “the high price burden indicates significant strain on energy-dependent sectors like textiles,” highlighting the broader implications for economic stability.
In light of these challenges, officials have emphasized that India must aggressively diversify its energy resources to mitigate future risks. As one analyst noted, “India needs to boldly diversify its energy resources.”
