Workers are retreating to the safety of their hometowns, as the ongoing West Asia war has triggered a cooking gas supply crunch, spiking the cost of living. Staffing firms have reported a 10-15% rise in hiring costs over a month, while hiring agents are closely tracking labour demand trends in the consumer, banking and construction industries.
“We do blue-collar hiring, mainly in the manufacturing and supply chain sectors, and there, the costs of getting workforce in the metros has gone up by about 15-20% in a month,” said Neeti Sharma, chief executive officer of TeamLease Digital, part of the staffing firm TeamLease Group.
Scarcity of liquefied petroleum gas (LPG) has forced construction and manufacturing sectors' blue-collared workers—scaffolders, plumbers, welders, etc.—back to their hometowns and villages.
Radheshyam and four others together iron clothes in south Mumbai. These migrant workers from Rae Bareli, Uttar Pradesh, together typically use one LPG (liquefied petroleum gas) cylinder for a little over a month. “A cylinder costs us ₹1,000, but yesterday I bought it for ₹5,000," he said. “Many of my neighbours, who work as labourers, have returned to their villages. We have managed to get the cylinder this time. But going ahead, we don’t know…”
Upcoming assembly polls in four states—Assam, Kerala, West Bengal, Tamil Nadu—was yet another push factor for many from these states to be home, hiring firms said.
Ironically, this tightness in labour supply comes even as many blue-collar workers' plans to work in West Asia—the Gulf Cooperation Council, United Arab Emirates, Bahrain, Kuwait, Oman, Qatar and Saudi Arabia—getting disrupted due to the war.
Sachin Chhabra, founder and chief executive at Nia.one, a platform that provides living facilities, food and other essential support services for migrant workers, said they are indeed returning to their hometowns.
"Workers have been complaining and struggling to meet food costs. We have workers who have started availing the food service we offer, instead of cooking themselves or arranging it from elsewhere, because of the LPG shortage and costs," Chhabra said. Nia.one, which offers a meal for ₹49, has around 8,000 workers enlisted and it operates in the manufacturing hubs of Pune in Maharashtra, Sriperumbudur and Hosur in Tamil Nadu, and Farrukhnagar near Gurugram in Haryana.
Mint had reported on Monday that developers across Mumbai, Delhi-NCR and Pune said that the war-triggered spike in LPG prices has raised the cost of living for migrant workers, leading to a dip in labour availability across key property markets.
“There is a visible but controlled increase in labour costs, typically in the range of 5–10% across certain categories and geographies. But the more important point is why. This is not just wage inflation—it is cost-of-survival inflation. When everyday essentials become expensive, labour does not negotiate; it reprices,” said Ashwinder R. Singh, chairman of the Confederation of Indian Industry (CII) Real Estate Committee. “Labour costs have already risen 5–15% due to the demand-supply mismatch, developers estimated, with the long-term impact likely to be more severe”.
Adecco, a staffing firm, is taking fortnightly reviews, instead of the usual monthly ones, to understand the changes in hiring demand. “After the war started, there is a tightness in demand in medium and small-scale enterprises, fast moving consumer goods (FMCG) and the textile industry,” said Sunil C., country manager for Adecco India. Manufacturing and banking, financial services and insurance (BFSI) are still hiring “as of now”, said the staffing firm.
For temporary and blue collared hiring, April-November is crucial as sales shoot up during the summer, holiday and festive seasons. “We're looking at a muted hiring period if the war continues for a few more weeks, and there will be concerns from the demand side,” noted Sunil C. Temporary workers are on the vendors' payroll but are employed at the client site for one-three years.
Some industry players attribute the workforce crunch to seasonal factors too. “There have been temporary disruptions in workforce availability, particularly among delivery partners and warehouse staff, driven largely by seasonal and external factors," said Ajay Rao, founder and chief executive of logistics firm Emiza.
He said a significant portion of the workforce, especially migrant labour, which makes 40-50% of the workforce, went to their hometowns for Holi, and did not return, leading to an around 20% drop in headcount at its peak. “This was further compounded by issues like LPG cylinder shortages, which impacted workers’ plans to return,” Rao said.
He, for sure, now sees the situation having stabilized in many sectors, and workforce availability “largely back to normal levels”.
Gig pressures
There's another side to this scenario too. While labour-intensive industries are seeing wage pressure, the gig and service roles—mostly at logistics and e-commerce platforms—are also facing income compression.
“In the food delivery space, delivery riders are seeing a 10-20% drop in order volumes and an estimated 10-15% decline in weekly take-home earnings,” said Sonal Arora, country manager at HR services firm GI Group Holding.
Food delivery volumes are hit, as restaurants are also scrambling to secure cooking gas. Many eateries have reduced menus to keep the business running, and this has resulted in lower take-home earnings for delivery workers.
Amid these emerging pressures, some firms are taking a calibrated approach to manage cost pressures and double down on retention.
Angad Singh, founding team member at quick commerce enablement platform Zippee, indicated companies are stepping up investments in worker welfare and operational efficiency, while also ramping up incentives to manage current fluctuations. This includes hikes in performance- and tenure-linked payouts.