Firozabad's Furnaces Are Going Cold

Image: Granth Handicrafts

The Financial Times has reported on the deepening energy crisis gripping Firozabad, Uttar Pradesh's famed glassmaking city. Karvaan India looks at what the situation means for the industry and the people who depend on it.

Mukesh Bansal has run Shri Sitaram Glassworks in Firozabad for long enough to remember the last time the industry nearly collapsed. In 1996, a Supreme Court order forced the city's factories to abandon coal and switch to gas overnight, to protect the Taj Mahal's marble from ash damage. Only a third of the businesses survived. Now, as gas supplies tighten and energy costs climb, he finds himself wondering whether this time will be worse.

"This is the worst crisis to ever hit us," Bansal said.

Firozabad, a city in Uttar Pradesh, has carried a four-century tradition of glassmaking and built a global reputation for its handblown bangles, tumblers and chandeliers. Up to one million people find employment, direct or indirect, through the industry. About 200 companies generate more than a billion dollars in annual revenue. That ecosystem has come under severe strain after disruptions to gas supplies from the Gulf, where the closure of the Strait of Hormuz, following the US-Israeli war in Iran, has constrained imports and sent energy prices soaring.

Two-thirds of India's gas imports originate in the Middle East. Since early March, glassmakers in Firozabad have reported gas supply cuts of more than 20 per cent, with average output falling by around 30 per cent as a result. Fuel costs can account for up to 35 per cent of total glassmaking expenses, feeding furnaces that must be kept continuously lit at temperatures reaching 1,000 degrees Celsius. For factories already running on thin margins, the arithmetic has turned brutal.

Raj Kumar Mittal, president of the Uttar Pradesh Glass Manufacturers Syndicate, told the FT that supplies of soda ash, a key component in glass production, have also been nearly halted. Much of that soda ash had previously come from Iran, a supply line the war has effectively severed.

The effects have spread well beyond energy bills. Exports, which represent about 30 per cent of Firozabad's production and flow mainly to the United States and the Gulf, have fallen as shipping costs have risen. Bansal's workshop would ordinarily be producing Halloween and Christmas ornaments for the American market at this time of year. With production costs up by 25 per cent, many of his furnaces risk going cold instead.

Smaller producers have been searching for alternatives with limited success. Ashish Ojha's family has made glass sculptures of Hindu deities for more than three decades. He has turned to liquefied petroleum gas cylinders normally intended for cooking, only to find that their price has risen by 50 per cent, forcing him to halve output. "We're not involved in the war, but we're bearing the brunt of it," Ojha said.

Firozabad's distress sits within a considerably wider economic pressure on Indian manufacturing. Small and medium-sized enterprises account for roughly 30 per cent of GDP and 45 per cent of exports. Abhishek Kumar, president of the Entrepreneurs Association of India, told the FT that 26 per cent of the country's 30 million-plus small manufacturers were "on life support" because of rising energy, chemical and transport costs. That strain arrived alongside a decision by US President Donald Trump last year to raise tariffs on Indian exports to 50 per cent, a move intended to penalise New Delhi for purchasing Russian oil.

Prime Minister Narendra Modi has appealed to Indians to conserve fuel and tighten spending, urging citizens to work from home, use public transport, avoid overseas travel and suspend non-essential gold purchases. His administration has privately warned that an economic shock may be unavoidable. The UN Development Programme warned last month that the Middle East conflict could push as many as 2.5 million people in India into poverty.

Washington and Tehran are currently in negotiations that could extend a fragile ceasefire and include a gradual reopening of the Strait of Hormuz to energy shipments. Whether any agreement will arrive in time to spare Firozabad's furnaces remains uncertain.

"Somehow we keep going," Bansal said. "But we don't know for how long."