Hormuz Crisis Hits J&K Industry, 350+ Units Affected

(MENAFN- Kashmir Observer) Srinagar- The ongoing crisis in West Asia and the disruption of supplies through the Strait of Hormuz have begun to severely impact industrial activity in Jammu and Kashmir, with over 350 units reporting sharp declines in production.

A large number of petrochemical-based units, along with industries linked to food processing and plastic manufacturing, have been hit due to their heavy dependence on raw materials and LPG supplies from Gulf countries. With supply chains disrupted for several weeks, production in many of these units has dropped to below 50 percent, Daily Excelsior reported.

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Official sources said that industrial units reliant on imports from Gulf nations are now attempting to source raw materials from alternative markets. However, the sudden disruption has created shortages and significantly increased input costs, affecting operational stability.

The worst-affected clusters include Bari Brahmana Industrial Complex in Samba district, Gangyal Industrial Estate in Jammu, SIDCO Industrial Complex in Samba, and Kathua Industrial Estate. Several units, particularly those dependent on daily LPG tanker supplies, are struggling to maintain operations amid reduced fuel availability.

Recognising the emerging crisis, the Union Ministry of Industries and Commerce has initiated a survey through its MSME Development and Facilitation Office in Jammu. The exercise aims to assess the extent of production losses, identify supply sources, and quantify the financial impact on affected units.

Amit Tamaria, Head of the MSME Development and Facilitation Office in Jammu, confirmed that a standardised format has been circulated among industrial associations to collect data on production declines and losses. He said responses are still being compiled and will be forwarded to the central office in Delhi.

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According to Varindra Jain, Chairman of the Federation of Industries Jammu, nearly 350 to 400 units in the region have been directly or indirectly affected by the crisis. He noted that a dozen bitumen-related units have seen operations nearly come to a halt, disrupting road construction works due to shortages in supply, much of which earlier came from Iran and Iraq.

Plastic manufacturing units have also been hit hard, with over 50 to 60 units witnessing production levels fall below half capacity. Many of these units depend on imported plastic granules from Gulf countries. Rising raw material costs, in some cases doubling or tripling, have pushed several units toward the brink of closure while workers remain underutilised.

Industries linked to resins, paints, and food processing are similarly facing severe disruptions. Reduced LPG supply has further compounded the crisis. While oil companies had earlier cut supply to 30 percent, it was later increased to around 50 percent following protests by industry bodies, though many units still report shortages.

Industrialists have warned of mounting financial stress due to declining production, rising input costs, and delayed payments in the market. With both imports and exports affected over the past two months, uncertainty continues to loom over the sector.

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Lalit Mahajan, President of the Bari Brahmana Industries Association, said the body has approached the Reserve Bank of India's regional office in Jammu, seeking relief measures for affected units. These include a 20 percent enhancement in working capital limits for one year and waiver of interest on term loans and working capital facilities until December 31, 2026.

He also pointed to a decline in demand for finished goods and delays in payment cycles, warning that prolonged disruption could lead to closures of several units across the region.

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