Even before the United States and Israel launched their war with Iran, life on the industrial outskirts of New Delhi was already a daily struggle for workers such as Kunta Devi and her son Raja Babu. Their combined monthly income of Rs20,000 barely covered rent, food and transport. But when the price of cooking gas suddenly quadrupled amid global energy market turmoil, survival in the city became impossible.
Like thousands of other migrant labourers, Devi and her 24-year-old son abandoned their factory jobs and returned to their home village, where free accommodation and government food aid offered at least some relief from the crushing costs of urban life. Speaking about the decision, Raja Babu said their future now depended on an end to the conflict that had sent fuel prices soaring.
“Our lives won’t be back on track until the war ends because of the rise in the price of cooking gas,” he said.
The human consequences of the energy crisis are unfolding across India’s industrial centres, threatening the country’s ambitions of becoming a global manufacturing alternative to China. Prime Minister Narendra Modi has urged Indians to tighten their belts as the world’s third-largest oil importer struggles to contain mounting economic disruption caused by rising fuel prices.
Although official industrial production data for April has yet to be released, labour activists say the scale of the worker exodus is already enormous. Shreya Ghosh, from the Centre for Struggling Trade Unions, estimated that hundreds of thousands of workers had left industrial areas in recent weeks.
“The LPG price rise made life unbearable,” she said. “No one can survive on wages even close to 11,000 rupees.”
The industrial hub of Noida, near New Delhi, has become a symbol of the growing crisis. Streets once crowded with workers heading to garment factories and call centres are now witnessing protests, shuttered facilities and departing labourers carrying bags towards railway stations.
Suraj Yadav, who runs a tea and snack stall beside a call centre affected by unrest, said many workers simply could no longer afford to remain in the city once cooking gas prices surged. Pointing to smashed windows at nearby offices, he said the anger reflected years of frustration over stagnant wages and rising living costs.
The government of Uttar Pradesh responded to the protests by raising the minimum wage by as much as 21 per cent. But the move sparked fierce criticism from business leaders, who warned that higher labour costs could drive companies away from the state.
In a written statement cited by the Financial Times, the Confederation of Indian Industry argued that sharply increasing minimum wages would make operating costs unsustainable across sectors and could force manufacturers to relocate to cheaper regions.
Factory owners say the pressure is becoming unbearable. Vikram, a manager at a clothing factory in Noida who declined to provide his full name, said his plant was operating at only 30 per cent capacity because so many workers had left. Following the wage increase, he warned that Noida was no longer economically viable for manufacturers.
“We cannot make money, so we will need to move to Madhya Pradesh where costs are lower,” he said.
The crisis extends far beyond wages. Since the Iran conflict erupted, manufacturers have also faced steep increases in raw material and fuel costs. Indian businesses already struggling against fierce competition from China, Vietnam and Bangladesh now fear they may lose further ground.
Vinod Sharma, a representative of the Uttar Pradesh branch of the Confederation of Indian Industry, said most businesses in the region survive on razor-thin profit margins. According to him, Chinese manufacturers continue to dominate pricing because of state subsidies, overcapacity and company-provided worker housing — advantages Indian factories largely lack.
“The reality is that China sets the price for our products,” Sharma said. “They have overcapacity, state subsidies and they provide dormitories for workers at their factories. We have none of this.”
For many economists, the turmoil reveals a deeper structural problem within India’s economic model. The government’s “Make in India” campaign has sought to transform the country into a manufacturing powerhouse capable of rivaling China in global supply chains. Yet critics argue that the strategy depends heavily on low-paid migrant labourers who are increasingly unable to survive in urban industrial centres.
Himanshu, a labour economist at Jawaharlal Nehru University, said wages have failed to keep pace with inflation for more than a decade. He warned that India could not realistically aspire to become a developed economy while millions of workers remained trapped in poverty.
“You can’t have a developed economy where workers are not earning enough to live,” he said. “Workers’ wages have not kept pace with prices and since 2011-12, there has been a steady decline.”
At New Delhi’s sprawling railway station, the impact of the crisis is visible in the crowds lining up for trains heading back to rural India. Many passengers are migrant workers abandoning industrial jobs that no longer provide enough income to survive.
Railway porter Vijender said the increase in gas prices had devastated working families. Gesturing towards the packed platforms, he observed that countless people were now returning to their villages because city life had become unaffordable.
Among them was the father of 17-year-old Saniya Qureshi, who left Noida to return to the family’s village of Unnao after hearing about a government programme offering free housing there. Qureshi’s family had already been struggling in the city. Six relatives shared a single cramped room with a concrete floor in a Noida slum, sleeping on thin rubber mats and relying on a communal water tap and outdoor toilet.
The room cost Rs4,000 a month, while Qureshi’s mother earned only Rs11,000 for gruelling 12-hour shifts packing clothes at a nearby factory.
Since the war began and energy prices surged, the family could no longer afford cooking gas and had switched to burning wood for meals.
Standing at the entrance of the family’s sparse one-room home, Qureshi described the desperation now consuming many working-class families across India.
“Everything is so expensive,” she said. “How does one live and eat?”
