Gulf War Hits India's Sports Infra Industry As Raw Material Costs Escalate

Worth over $2.5 billion (₹ 23,000 crore) in multiple estimates, India's Sports Infrastructure Industry is currently facing a crisis of cost escalation as the ongoing Gulf war disrupts supply chain of petroleum products which are essential raw material for the companies involved in developing such facilities.

The cost of raw material for athletic track systems, artificial sports turf, polyurethane-based components, and PVC vinyl sports flooring systems has gone up by (15 to 20) % thanks to the war.

All these raw materials are petro-chemical and natural gas byproducts and due to the disruption in supply chain, which has caused a surge in oil and gas prices globally, their procurement too has become difficult and expensive.

"The impact is significant. We import a large portion of the raw materials used in athletic tracks, artificial sports turf systems, and PVC vinyl sports flooring. Over the last few months, material costs have increased by nearly 15 per cent, while the strengthening of the dollar has added another 10 per cent impact on procurement costs," said Nasir Ali, founder and CEO of Gallant Sports & Infra, told PTI.

"Many of these (raw materials) products are petroleum-based and are directly affected by fluctuations in global commodity prices and currency exchange rates.

"projects awarded or executed in the last few months, particularly those dependent on imported materials and asphalt-bitumen-based infrastructure, could benefit from temporary support mechanisms or relief measures to absorb the sudden increase in input costs," he added.

Ali's Gallant Infra built the FIFA-certified Tawang Stadium in Arunachal Pradesh which is used for training the Indian Football team for high altitude play. His company is also involved in several other government sports infrastructure projects, including the ones under its flagship Khelo India Scheme.

"For a highly price-sensitive market like India, these increases put pressure on project viability, margins, and execution time-lines. Companies are often locked into contracts signed months earlier, making it difficult to pass on these additional costs to clients," he said.

A sports ministry source said government contracts already have the Force Majeure clause, which allows companies to revise their quotations during circumstances which are beyond anyone's control, including natural calamities and wars.

"The provision is there from the tendering process stage and the government is there to absorb the pressure if cost goes up due to something like war. (Industry would not be allowed to suffer," the source said.

The government is also working towards formulating a sports code for manufacturing that would lay down the framework for the industry's operations.

Gallant is currently involved in a Sports Authority of India (SAI) project in Mizoram, and an athletics track project for the Indian Navy, among others.

"One of our most significant ongoing developments is at Manipal Academy of Higher Education (MAHE), where we are nearing completion of what will be one of India's largest integrated university sports infrastructure projects," Ali elaborated.

"The facility includes a full-sized cricket ground, World Athletics-standard track, FIFA-standard football field, FIH-standard hockey field, basketball courts, volleyball courts, cricket practice facilities, and multiple supporting sports amenities within a single integrated sports ecosystem," he added.

Gallant is one among the growing number of sports infra companies in the country, the other prominent names being SE TransStadia Limited, 4K Sports Infra and the Hyderabad-based Great SportsTech Limited among others.

Ali said India's sports infrastructure industry has the potential to grow exponentially but "gaps" remain in maintenance standards, and manufacturing self-reliance. The industry is expected to be worth $6 billion by 2030.

Globally, the industry is worth $132 billion with North America having the largest market share of over 30%, followed by China.

"While demand for sports facilities is increasing rapidly, there is still a shortage of certified, international-standard venues across many parts of the country," Ali said.

"The industry would also benefit from greater investment in indigenous manufacturing capabilities, quality benchmarks, and long-term maintenance frameworks to ensure facilities continue performing at international standards throughout their life-cycle," he added.

Ali said the long-term solution lies in strengthening domestic manufacturing under the Make in India initiative.

"India needs greater support for sports infrastructure manufacturing through subsidies for land, factory sheds, machinery, and production facilities. Manufacturing must become more attractive and commercially viable," he said.