India: Gig & Manufacturing Exodus Due to LPG Crisis

India’s gig and manufacturing sectors are facing a reverse migration as rising LPG prices and supply chain disruptions, exacerbated by tensions in West Asia, impact the livelihoods of gig and manufacturing workers. This situation is reminiscent of the mass migration seen six years ago, though the scale is not yet as large.

Global supply chains, particularly those involving the Strait of Hormuz, have been strained due to geopolitical tensions. This impacts India’s LPG supply, with nearly 90% of its LPG imports passing through this route. Although Iran has labeled India a “friendly nation,” allowing safe passage for Indian vessels, LPG supply has not normalized, leading to increased prices and scarcity.

The price of a 5 Kg LPG cylinder has quadrupled, causing panic among gig and blue-collar workers. A Delhi-based househelp worker migrating back to West Bengal told Inc42 that rising cylinder prices and rumors of factory shutdowns due to increased diesel prices are driving her decision. Around 200-300 people are reportedly leaving from one colony in East Delhi alone.

Major urban centers like Mumbai and Bengaluru are also witnessing similar migration patterns. Nia.one, a startup connecting gig workers with employers, reports increasing uncertainty among its members, who are struggling to send money home due to rising costs.

Food delivery and ride-hailing platforms are also affected. Rahul Kumar, a Zomato delivery worker, mentioned that several colleagues have already left for their villages. Smaller restaurants are shutting down or limiting menus, reducing order volumes and earnings for delivery workers. The Telangana Gig and Platform Workers’ Union (TGPWU) and Indian Federation of App-Based Transport Workers (IFAT) have appealed to the union minister for petroleum and natural gas, Hardeep Singh Puri, regarding the issues faced by drivers relying on CNG.

The textile hubs of Coimbatore and Tiruppur have seen over 300,000 migrant workers not returning after Holi and Ram Navami, impacting D2C brands in fashion, beauty, and lifestyle categories. Libas founder Siddhant Keshwani noted a 30-40% workforce reduction in their supply chain, particularly in Surat, Ahmedabad, Delhi NCR, and Jaipur. Libas is considering measures like providing induction cooktops or compensating for higher LPG costs.

While home decor startup Vaaree hasn’t seen warehouse impacts, their third-party manufacturers in Tier II and Tier III cities are facing high costs. As the conflict in West Asia continues, the Indian government’s efforts to stabilize LPG supply may provide short-term relief, but prolonged war and inflation could exacerbate the situation.