LPG Crisis Triggers Another Exodus Of India’s Gig And Manufacturing Workers

Six years ago, flyovers across India witnessed streams of migrant and gig workers walking miles to reach home. It was about survival back then, and it still is about survival now, even if the same scenes have not yet been witnessed. 

Amid escalating tensions in West Asia and the conflict between US-Israel and Iran, global supply chains have come under strain, hitting India’s LPG or cooking gas consumers.

Vessel movement and trade through the Strait of Hormuz is almost at a standstill, impacting about 25% of the world’s seaborne oil trade. In particular the route is vital for India’s and the global LPG supply, accounting for nearly 29% of global trade. 

Nearly 90% of India’s LPG imports pass through the Strait of Hormuz. 

In a recent development, Iran has labelled India a “friendly nation,” allowing Indian-flagged vessels to safely commute through the route.

Even after that, the LPG supply has not settled back to normal levels, resulting in large-scale bootlegging, predatory sales and unavailability of LPG for even those registered with the government.

Ultimately, the blockage has resulted in a multifold jump in LPG prices for end consumers in India. A 5 Kg LPG cylinder, which used to cost ₹100 for households, is now being sold at ₹400 each, creating panic among people, specially gig and blue collar workers who are far away from their home towns, and depending on the urban ecosystem.

Inc42 has spoken to multiple gig workers to enquire about the gravity of the situation. 

“The cylinder prices have gone up. A 5 Kg LPG cylinder requires refills every 10-15 days. We do not earn this kind of money from work, hence we are moving back. My husband works at a manufacturing factory and there are rumours that it might also shut due to rise in diesel prices. Back in the village, we can at least prepare food with a mud stove and firewood,” a Delhi-based househelp worker, who is migrating back to her village in West Bengal, told Inc42. 

Around 200-300 people are moving back from one colony in East Delhi, which houses several hundreds of gig workers, she added. 

The On Ground Reality Check

A similar trend is unfolding across India, with major urban centres like Mumbai and Bengaluru also witnessing this pattern of migration, as per multiple reports. 

While data is not available on the number of gig workers impacted by the LPG crisis, anecdotally several other gig workers — delivery partners and part-time professionals — have also admitted that the supply crunch is forcing them to return to their villages and home towns from major cities. 

Nia.one, a startup which connects gig workers to employers and offers accommodation, meals, and upskilling opportunities, said it is sensing some tension among the workers that are its members. 

Nia.one founder Sachin Chhabra told Inc42, “There is definitely concern which is picking up, we know that people are now uncertain. Most of them are waiting for their salary for, which comes around 7th of every month. They need to send ₹10,000 home, that’s the broad mathematics they come to gig work with. So the moment they start feeling this pinch, at some point of time they will make a call and return because they are not willing to work here only to save ₹6,000-7,000 a month.”

What’s worse is that prices of food items have also gone up in the unorganised and informal sector, which largely relies on bootlegged LPG to power their kitchen stoves. Breakfast items that earlier cost INR 30 in Tamil Nadu’s Sriperumbudur, for instance, are now being sold at ₹45. Many suppliers attribute the increase in menu prices to the LPG shortage and related inflation, Chhabra added. 

Delivery Ops, Mobility Under Strain

Gig workers associated with food delivery, quick commerce and ride hailing platforms are also going through the exact same challenge as cost of living increases. 

Rahul Kumar, a delivery worker for Zomato and a resident of Delhi, said that at least six other delivery workers he knows have left for their villages from Delhi in the past three days. More are ready to leave if the LPG crunch continues. He further said that no directive has come from Zomato about the situation. 

For food delivery workers, there’s the additional concern that many smaller restaurants have shut down or limited their menus, which has reduced the number of orders fulfilled and therefore impacted their daily earnings.  

Eternal’s Zomato and Swiggy did not respond to questions about the impact seen on its delivery workforce across their various verticals, nor about the volume of orders in recent weeks as the LPG crisis has boiled over.

App-based auto and cab drivers face the double whammy of a potential rise in fuel prices along with the fact that many continue to use informally-supplied LPGs. Similar to delivery workers, many app-based drivers are expected to join the exodus of migrant workers, unless the prices stabilise. 

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

“Drivers who rely entirely on CNG for their operations are the worst affected. Many have reported waiting for hours to refill their vehicles, resulting in the loss of valuable working time and income,” the letter states. 

Staffing and recruiting giant Teamlease vice president Balasubramanium Anantha Narayanan believes gig workers at food delivery companies might turn to ecommerce to find work and boost income temporarily. 

“There could be pockets where there is underutilisation but the chances of permanent unemployment are low as enough demand exists in the market to absorb. While there are several businesses which are heavily dependent on gas for production, even if it has resulted in displacement, the demand for workers is enough in other sectors,” he added. 

D2C Brands, Retail Ecosystem Suffers

The problem is that most gig workers cannot simply jump over from one gig to another. Most of them do not have the social support system to find new opportunities. This is especially true for those who make a living working in manufacturing units and other semi-skilled jobs. 

As per a report in The Print, more than 3 Lakh migrant workers employed in the textile hubs of Coimbatore and Tiruppur have not returned after travelling to their home states for Holi and Ram Navami in March. A similar exodus of workers has been observed in Gujarat in the textile and chemical industries, according to reporting by The Wire. 

Other reports have indicated that new worker addition has not yet recovered even after the exodus amid the Covid-19 pandemic in 2020 when millions of workers returned home due to the lockdown restrictions. Employment in registered factories rose from just over 4 Lakh in 2020 to 4.1 lakh in 2024, even as the number of units increased from 8,643 to 8,869, according to Delhi government data. 

Another exodus of workers will not help revive the employment count in these factories. The worker displacement has ramifications for several 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. 

Among the D2C startups and brands that we spoke to, the workforce at manufacturing units has reduced by a third in the past four weeks as the war in West Asia escalated. 

Speaking to Inc42, ethnic wear company Libas’ founder Siddhant Keshwani said the brand’s supply chain has seen some disruption particularly in Surat, Ahmedabad, Delhi NCR and Jaipur

While its warehouses had some workers at the end of March, many were waiting for their salaries for the month to take a call on whether to return home. “We have already started seeing that 30-40% of the workforce has started already going back,” Keshwani added. 

Libas is considering solutions such as allowing workers to rent induction cooktops or compensating them for the higher LPG charges for the next two months, among others. 

“Several of our workers went to their hometowns for Eid like every year, but each year we are back at full capacity by now. This time around, we are seeing 30-35% absenteeism in our manufacturing front,” another fashion brand founder told Inc42 on the condition of anonymity.

On the contrary, home decor startup Vaaree founder Varun Vohra said that they have not seen any impact on the warehouse front, which is usually located in Tier I cities. However, some of the third-party manufacturers located in Tier II and Tier III cities are facing high cost issues due to dependence on gas. 

As the war in West Asia rages on for a sixth week now with no end in sight, many workers would be hoping that the Indian government’s efforts to restabilise LPG supply to individual homes and households could bring some relief in the short term. The prospect of a prolonged war and long-term inflation might result in the same scenes that we sadly saw in 2020 during the lockdowns.  

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