Middle East War Hits Daman Plastic Industry: 25% Units Shut as Raw Material Prices Surge

Daman | Union Territory — The ripple effects of the escalating conflict between Iran and Israel are now being felt far beyond the Middle East, with industrial clusters in western India beginning to struggle under the pressure. In the union territory of Daman, nearly 25 percent of plastic manufacturing units have temporarily shut down as raw material prices skyrocket, leaving small and medium manufacturers grappling with uncertainty.

Industrialists say the sharp increase in plastic granule prices—reportedly up to 50 percent in just a week—has made it nearly impossible for many units to continue production. The sudden surge has raised serious concerns within the industry, with many suspecting that the spike may not be driven entirely by the geopolitical crisis but also by profiteering within the petrochemical supply chain.

Daman is home to a large network of plastic manufacturers, with around 1,500 small and large units operating in the region. These units rely heavily on petrochemical-based raw materials derived from crude oil. As global markets react to the ongoing Middle East tensions, the cost of these materials has surged dramatically.

A local industrialist explained the impact of the sudden price jump. “The cost of plastic granules has increased by nearly 40 to 50 percent in just seven days. For small and medium manufacturers, this is unsustainable. Many units have been forced to halt production temporarily,” he said.

According to industry sources, the problem is compounded by limited supply from major petrochemical companies. Several manufacturers claim that suppliers are currently releasing raw materials in restricted quantities, creating additional uncertainty in the market.

“Many companies are supplying only limited stock, which is increasing panic in the market,” said another manufacturer from the Daman industrial belt. “Because of this, several units have reduced production while others have shut down operations altogether.”

Industrialists acknowledge that global instability caused by the conflict has naturally impacted crude oil and petrochemical markets. However, many believe that the speed and scale of the price increase cannot be explained by the war alone.

“There is a strong suspicion that large polymer companies have held back stock and created an artificial shortage in the market,” an industry representative alleged. “This allows them to raise prices quickly and make huge profits under the guise of war.”

Experts warn that if the geopolitical tensions continue for an extended period, the situation could worsen for smaller manufacturers who operate on thin profit margins. Rising raw material costs combined with limited supply could push more units toward temporary closure.

Even if the conflict stabilizes soon, industry insiders believe that the market may take time to recover. “If the situation improves quickly, it could still take two to three months for raw material prices to stabilize,” an industrialist said.