India LPG Crisis: Gig Workers Exodus & Manufacturing Impact

A crisis involving the supply of LPG, or cooking gas, is triggering a new wave of migration among India’s gig and manufacturing workers. This comes six years after similar migrations were seen across the country.

Escalating tensions in West Asia and the ongoing conflict involving the US, Israel, and Iran have placed a strain on global supply chains, impacting Indian consumers. Disrupted vessel movement through the Strait of Hormuz is affecting approximately 25% of the world’s seaborne oil trade, a route critical for India’s LPG supply, which accounts for nearly 29% of global trade.

Almost 90% of India’s LPG imports pass through the Strait of Hormuz. While Iran has labeled India a “friendly nation,” allowing Indian vessels safe passage, the LPG supply has not returned to normal levels. This has resulted in bootlegging, predatory sales, and unavailability of LPG even for registered consumers.

The crisis has caused a significant increase in LPG prices for Indian consumers. A 5 Kg LPG cylinder, previously costing ₹100, is now being sold at ₹400, creating panic among gig and blue-collar workers who depend on the urban ecosystem.

Reports indicate that a similar trend is unfolding across India, with major urban centers like Mumbai and Bengaluru also experiencing migration. While precise data on the number of impacted gig workers is unavailable, many delivery partners and part-time professionals are returning to their home towns.

Sachin Chhabra, founder of Nia.one, a startup connecting gig workers with employers, noted growing uncertainty among workers. He explained that many workers need to send ₹10,000 home and will choose to return if they feel the pinch, unwilling to work just to save ₹6,000-7,000 a month.

Food prices have also risen in the unorganized sector, which relies on bootlegged LPG. Breakfast items in Tamil Nadu’s Sriperumbudur that previously cost INR 30 are now being sold at ₹45, with suppliers attributing the increase to the LPG shortage and related inflation, Chhabra added.

Gig workers in food delivery, quick commerce, and ride-hailing sectors face similar challenges as living costs increase. Rahul Kumar, a delivery worker for Zomato in Delhi, said that at least six other delivery workers he knows have left for their villages, with more ready to leave if the LPG crunch continues.

The Telangana Gig and Platform Workers’ Union (TGPWU) and the Indian Federation of App-Based Transport Workers (IFAT) have written to Hardeep Singh Puri, the union minister for petroleum and natural gas, to address these issues.

Balasubramanium Anantha Narayanan, vice president of staffing firm Teamlease, suggests gig workers at food delivery companies might temporarily turn to ecommerce for work. He believes that while some sectors face underutilization, enough demand exists in the market to absorb workers.

More than 300,000 migrant workers employed in the textile hubs of Coimbatore and Tiruppur have not returned after traveling to their home states for Holi and Ram Navami in March. A similar exodus has been observed in Gujarat’s textile and chemical industries. This worker displacement affects D2C and new-age brands in the fashion, beauty, and lifestyle categories, many of whom manufacture from units based in Tamil Nadu, Gujarat, and Delhi NCR.

Ethnic wear company Libas’ founder, Siddhant Keshwani, said the brand’s supply chain has seen disruption, particularly in Surat, Ahmedabad, Delhi NCR, and Jaipur. Libas is considering solutions such as renting induction cooktops for workers or compensating them for higher LPG charges.

As the conflict in West Asia continues, many workers hope the Indian government’s efforts to restabilize LPG supply will bring relief. However, the prospect of a prolonged war and long-term inflation could lead to a repeat of the migrations seen during the 2020 lockdowns.