Morbi Ceramic Industry Faces Deepening Crisis

Ceramic Industry Faces Deepening Crisis

India: Once globally recognised for tiles and clocks, Morbi, the city that put India’s ceramic industry on the world map is now facing one of its worst crises in decades due to intense international competition, overproduction, and what industry leaders describe as deeply flawed government regulations. More than 200 ceramic factories in Morbi are currently shut, with machinery lying idle, sheds deteriorating, and revival prospects dimming. While competition from countries such as China has eroded margins, industrialists say the biggest blow comes from the construction jantri, the government’s valuation of industrial structures. An industrial shed that costs around USD 39 per square metre to build is valued by authorities at nearly USD 138 per square metre, nearly four to five times the actual cost. As a result, a factory constructed for about USD 0.56 million is officially valued at USD 2.02–2.47 million, making transactions virtually impossible.

The impact is visible across Morbi, with closed factories filled with dusty machinery, unsold tile stocks, or left abandoned, and nearly 2,000 bighas of prime industrial land estimated at around USD 112 million lying unused. Veteran industrialist Mukesh Udhareja termed the jantri system the biggest roadblock, noting that construction depreciates at just 1.2% per year under jantri norms and reaches zero value only after 85 years, compared with 10% annual depreciation under Income Tax rules, despite ceramic sheds losing most of their value within 10 years. Sukhdevbhai Patel of Max Granite Pvt Ltd added that due to this technical flaw, factory loans and cash credit accounts are not being settled, affecting both industrialists and banks. Ceramic Association President Hareshbhai Bapolia confirmed that the issue has been repeatedly raised with the state government, warning that thousands of crores worth of land and infrastructure — now valued in the hundreds of millions of US dollars — continue to go to waste as the crisis deepens.

Source: The Blunt Times