Scores of manufacturing units in the Pune-Nashik industrial belt are experiencing a slowdown with over 30,000 migrant workers fleeing the area in the wake of the anti-north Indian tirade launched by the Maharashtra Navnirman Sena (MNS).
Industries in the area have suffered a combined loss of up to Rs 4 billion (approx $100 million) in the past fortnight of violence.
The immediate fallout could be a steep increase in the cost of labour, which in turn would lead to a hike - almost double in some cases, in the prices of goods manufactured in the industrial belt.
"The prices of steel products, electrical equipment and automobile parts are expected to nearly double in the coming weeks. The situation is a direct fallout of the non-availability of cheap, unskilled labour," Nashik Industrial Manufacturers' Association (NIMA) chairperson Abhay Kulkarni told IANS.
According to NIMA's estimates, nearly 30,000 labourers have left the industrial belt in the past two weeks of unrest sparked by the Raj Thackeray-led MNS. Many taxi drivers and street vendors were assaulted in Mumbai and a man in Nashik lost his life in the violence.
Apprehending more violence, the migrant workers have gone back to their homes in Bihar or Uttar Pradesh.
As a general rule, these labourers are recruited by agents who supply them to construction firms or small-scale industries for a lower minimal wage settlement.
In the process, the agents get huge commissions from firms for providing them with cheap labour.
The daily wages range between Rs 40 to Rs 300 depending on the nature of the work, Kulkarni said.
But in the current scenario, getting cheap labour is the biggest problem faced by the industry and there seems to be no alternative to these migrant workers in the industrial belt of Nashik and Pune, he added.
Kulkarni said a majority of these labourers were engaged by small and medium scale industries dotting the industrial belt.
The Nashik-Pune industrial belt is the hub of steel rolling mills, electrical and automobile industrial units. These include Tigrania Steels, Agrawal Steel, Crompton & Greaves, Bosch India, and Mahindra & Mahindra, among others.
"In fact, owing to the desertion by the north Indian migrant workers, the local workforce has declined by 30-35 per cent. Many companies have been compelled to halt their routine production and manufacturing activities till alternate arrangements are available," said a concerned Kulkarni.
"There is no alternative to migrants workers who were basically engaged for heavy physical labour like working in furnaces, loading and unloading of raw materials. In their absence, no production unit can function normally," said YM Singh, executive director of the luggage firm Samsonite that has a factory in the area.
"Since the north Indian migrants are generally found to be disciplined and hard working, it is having a direct bearing on the production facilities of all the industrial units here," he added.
The production schedules of various industries have gone haywire with the budget round the corner and the financial year ending soon, said Dhananjay Bhide, president of the Amber Industries & Manufacturing Association.
"The financial implications of this will be long-term and ultimately have a bearing on the higher prices that the end consumers shall be forced to pay," Bhide warned.
The NIMA said at least 20 steel rolling mills, which are located in and around Nashik, have abruptly stopped production due to the sudden shortage of labourers.
A major industrial unit like Mahindra & Mahindra, which has a sprawling automobile manufacturing unit, is facing a similar crisis. Heavy loading and unloading activities have come to a halt, which in turn has a cascading effect on the entire production cycle.