Morbi’s Ceramic Exporters Hit by Blocked Hormuz and Mounting Port and Shipping Costs

With the Strait of Hormuz effectively blocked, around 1,500 containers carrying ceramic exports from Morbi are stuck at Indian and Gulf ports, saddling exporters with heavy war risk surcharges, shipping levies and demurrage even as payments on dispatched consignments fall due. The boxes, largely loaded with wall, floor and vitrified tiles as well as sanitary ware worth about Rs 4–4.5 lakh per container, are parked at hubs such as Mundra or halted mid-transit, exposing Gujarat’s tile cluster to escalating costs and delivery uncertainties.

Morbi accounts for nearly 90% of India’s Rs 75,000-crore ceramic output, and Gulf Cooperation Council (GCC) markets and nearby countries together make up about Rs 6,000 crore—roughly a quarter—of the sector’s Rs 21,000-crore export basket. Exporters warn that shipping surcharges, demurrage and war risk fees are eroding margins on orders already shipped, while future bookings from West Asia remain on hold as the conflict drags on.

Nilesh Jetpariya, chairman of the ceramics panel at CAPEXIL, said average freight of 300–600 dollars per container has been dwarfed by a war risk surcharge of 4,000–5,000 dollars imposed by shipping lines, effectively doubling product prices and wiping out the typical 300-dollar profit per box. If buyers refuse to accept cargo at the higher landed cost, exporters risk footing both the surcharge and the return freight, he cautioned, calling the exposure unviable for shipments of 50 containers or more that can represent upwards of Rs 2 crore in cargo value.

Industry players have approached the Commerce and Ports, Shipping and Waterways ministries seeking intervention to roll back surcharges and provide relief on port-related costs for cargo stalled by the crisis. On March 6, the Centre notified Standard Operating Procedures for major ports, allowing West Asia-bound cargo to be treated as transhipment, opening up additional storage, facilitating ad-hoc vessel calls, prioritising perishable and returned export boxes, and advising ports to consider waivers or remissions of charges case by case.

Further, a March 8 communication from the Central Board of Indirect Taxes and Customs laid down customs procedures for handling export cargo brought back from international waters due to the closure of the Strait of Hormuz, including mandating that such vessels normally re-berth at the same Indian port they sailed from. Even so, Morbi exporters fear longer-term damage to their Gulf market pipeline, with no visibility on when hostilities will ease and normal sailings will resume.