Heat stress widens factory divide as MSMEs face rising summer costs

On a sweltering afternoon in May, with temperatures touching 46 degrees Celsius, machines at a pulp moulding unit on the outskirts of an industrial cluster in Uttar Pradesh continue running without pause. The presses steam, dryers operate, and slurry machines churn under tin roofing that traps heat inside the shopfloor. On such days, workers pause every hour for water, briefly step into shaded corners, and return to work. Fans and coolers run continuously.

So does the electricity meter. “Worker productivity dips during extreme heat to around 80 per cent,” owner of a pulp moulding unit in Uttar Pradesh's Muzaffarnagar told Business Standard. For manufacturers like him, extreme heat is no longer just a seasonal inconvenience or a worker welfare concern. It is increasingly emerging as a hidden operating cost through lower worker efficiency, higher cooling expenses and rising electricity consumption.

According to a report in The Times of India, micro, small and medium enterprises (MSMEs) in Madhya Pradesh recently estimated productivity losses of nearly 20 per cent due to extreme heat, with workers reporting exhaustion and recurring health issues. How factories are adapting to extreme heat Due to rising heat, industries are grappling with a three-pronged challenge: maintaining productivity, managing rising electricity costs and ensuring worker safety. Manufacturing units are reworking shopfloor practices to reduce the impact of extreme temperatures. These changes also reflect advisories issued in several districts, where authorities have directed industries to ensure ORS distribution, shaded rest areas, clean drinking water and regular hydration breaks.

For many manufacturing units, cooling arrangements have now become part of daily operations rather than optional upgrades. “At the unit, we provide facilities such as fans, coolers, cold drinks, ORS and clean drinking water for workers,” said the pulp moulding unit owner. “Labourers involved in mould drying are given 15-20 minute breaks after 1.5-2 hours of work.” Workers near heat-intensive machines are also given additional support. “Employees working near hot press machines are provided dedicated fans and protective uniforms to cope with shopfloor temperatures. Workers are allowed extra short breaks if needed, apart from the regular one-hour lunch break. Rest rooms and staff quarters are also available inside the premises,” he added. Manufacturers say medical preparedness and water access have also become essential during peak summer. “A medicine box and dispensary room are always available at the unit.

Water tankers are arranged to ensure uninterrupted supply,” said Prateek Bhatia, director at Krishnanchal Pulp & Papers Private Limited, a paper mill unit in Uttar Pradesh. Factory owners also said as summer sets in, shift timings are adjusted, with peak-summer work moved to night or evening hours wherever possible. The hidden summer cost Bhatia said operational expenses rise sharply in summer. “There is higher expenditure on motor maintenance, electricity bills, air conditioners, coolers and refrigerators during the hotter months," he said. Beyond energy costs, manufacturers point to a clear productivity impact.

Heat-related exhaustion and dehydration lead to more breaks, slower work cycles and reduced working hours, affecting overall output and dispatch timelines. This also poses risks to the country’s GDP.

According to Dr Vishwas Chitale, fellow at the Council on Energy, Environment and Water (CEEW), India lost an estimated $159 billion in labour capacity due to extreme heat in 2021, equivalent to 5.4 per cent of GDP. “Looking ahead, studies suggest heat stress could reduce India’s GDP by nearly 4.5 per cent by 2030,” Chitale said. The World Bank has estimated that rising heat and humidity could put up to 4.5 per cent of India’s GDP at risk by 2030 through loss of labour hours. The International Labour Organisation (ILO) has also projected that by 2030, more than 2 per cent of total working hours globally could be lost each year because it is too hot to work. Widening divide between large factories and MSMEs Climate resilience across India’s industrial ecosystem remains uneven.

Organised factories are relatively better equipped to implement heat safeguards compared with smaller and informal units. The Ministry of Labour & Employment has issued advisories to states, urging heatwave mitigation measures for workers, particularly those in heat-exposed jobs such as construction and brick kilns. “Brick kiln workers are among the worst affected during heatwaves. Across many kilns in India, there are almost no heat protection measures in place despite extreme temperatures,” said Nirmala Gorana, convenor of the National Campaign Committee for Eradication of Bonded Labour (NCCEBL). Business Standard spoke to Amit Kumar, a brick kiln worker from Uttar Pradesh who migrates seasonally to Punjab, who said, “Badi factory mei kaam karne wale majdooro ko suvidhaye milti hai, humein nhi (workers employed in big factories get better facilities, not us)." Basic safety measures, such as uniforms and safety equipment, are not provided.

Drinking water also remains a major concern. Amit said, “Maalik ki or se sirf ek paani ka tanker lagaya jata hai, aur usi paani ka istemal eent banane aur peene dono ke liye kiya jata hai (Only one water tanker is arranged by the owner, and the same water is used for brick-making and drinking purposes)." Medical support is also limited. “Yahan aas paas koi doctor ya medical suvidha nahi hai. Aam taur par maalik humein lagbhag ₹100 dekar khud ilaaj karwane ko kehta hai (There are no proper doctors or medical facilities nearby. Usually, the owner gives around ₹100 and asks us to manage treatment ourselves)," Kumar added.

In contrast, workers at organised units claim relatively better facilities. “Humein thanda paani, ORS, pankha aur cooler ki suvidha di gayi hai. Uniform bhi hai. Aaram karne ka man kare toh uske liye kamra bhi hai (We are provided with cool drinking water, ORS, fans and coolers. We also have uniforms.

There is a room for us if we feel like resting),” said Manoj Chaudhary, a worker at the pulp moulding factory in Muzaffarnagar.When worker health becomes a production risk Heat-related fatigue also increases the risk of human error and workplace accidents, particularly in units involving boilers, presses, furnaces, steam rollers and heavy machinery. In brick kilns, the risks intensify further. "Garmi ke dauran kai mazdooron ko chakkar, ulti, badan dard aur bukhar tak ho jata hai (Many workers complain of dizziness, vomiting, body pain and even fever during summers),” said Amit, a brick kiln worker. “Kuch mazdoor garmi ke waqt behosh bhi ho jate hain. Dehydration se bachne ke liye hum mein se kai log mahine mein kam se kam teen baar glucose drip lagwate hain (Some workers even faint during peak heat hours.

To avoid dehydration, many of us take glucose intravenous drips at least three times a month).” Heat rules exist, but enforcement remains uneven The divide between formal and informal sectors becomes sharper during heatwaves. While laws such as the Occupational Safety, Health and Working Conditions Code (OSHWC), 2020 and government advisories prescribe heat safety measures, implementation remains uneven. “Government heatwave advisories are not being uniformly implemented across industries.

While large-scale units demonstrate high compliance, severe gaps remain in unorganised and labour-intensive sectors,” said Anay Gupta, president of the All India Rubber Industries Association. One reason why larger units may be more willing to comply with guidelines is that they have the required capital, but also because they have large clients who require them to enforce labour protection measures.

However, this stands in contrast to informal units where there are no safeguards or measures. According to Gorana, workers often lack even the most basic safety facilities and labour protections remain weak. In most cases, heat mitigation measures are not properly implemented because there are too many workers for the same work and most are migrants willing to work at meagre wages in extreme conditions. Lack of awareness and weak enforcement are also contributing to poor implementation. “If one worker falls ill, the contractor will hire another in a day.

There is no dearth of workers to work in brick kilns," said Gorana. Financing the adaptation gap Studies say while many MSMEs invest in low-cost measures such as fans, coolers, ventilation and roof insulation, higher-cost upgrades remain difficult due to limited capital and lack of awareness.

According to CEEW's Chitale, MSMEs and smaller manufacturing units require targeted support. “On financing, MSMEs operating on thin margins have limited capacity to self-fund climate adaptation. Concessional finance for resilient infrastructure and subsidised climate risk assessments can unlock action at scale,” he said.

According to World Resources Institute (WRI) India, employers also need clearer information on how heat affects productivity and the economic benefits of low-cost interventions. The organisation has suggested that financial bodies such as SIDBI could explore dedicated loan products for heat-resilient upgrades. Chitale added that shared infrastructure and pooled resources could help bridge the adaptation gap: “Pooling resources for early warning systems and cooling infrastructure allows smaller firms to access interventions they could not afford individually." For MSMEs and labour-intensive units, the challenge ahead is going to be tougher. Without affordable finance, clearer guidance and stronger enforcement, the cost of adapting to extreme heat may continue to fall hardest on workers least protected from it.