Increase in the prices of coal and pig iron and rise in electricity tariff have forced the closure of 100 manufacturing plants and around 2,000 spare parts units in the region.
The industry, which once accounted for nearly 50 per cent of the diesel pump production in the country, is now reeling under stiff competition from China.
The manufacturing units were getting coal at Rs 4,500 per tonne three months back. But the prices have now jumped to Rs 8,400 a tonne.
The price of pig iron has shot up to Rs 14,500 a tonne from Rs 8,400 a few months ago. Govindbhai Patel of Standard Agro, a leading exporter of diesel engines, said frequent hike in raw material prices has pushed the industry to trouble.
The production cost has shot up by 40 per cent in the last eight months and this has led to a 20 to 25 per cent increase in the price of diesel pumps.
