![\"\"](\"https:\/\/indiantextilejournal.com\/wp-content\/uploads\/Gemini_Generated_Image_ehda33ehda33ehda.jpg\")
<\/p>\n<\/p>\n
The West-Asia conflict has been a wake-up call for Indian textile industry, as the cost has gone up exposing vulnerabilities in fuel, raw materials, logistics, and export demand. Yet, Divya Shetty<\/strong> highlights opportunities for Indian to win diverted orders by improving speed, cost, and sustainability.<\/em><\/p>\n The ongoing conflict in West Asia has begun casting a long shadow over India\u2019s textile and apparel industry, with the manmade fibre (MMF) segment facing the sharpest and most immediate disruptions. As global crude oil and gas markets turn volatile, Indian textile manufacturers are grappling with rising raw material costs, supply constraints, logistics delays, and a sharp decline in buying sentiment\u2014both in domestic and export markets.<\/p>\n Industry leaders warn that while the full impact is still unfolding, the situation has already triggered a chain reaction across the textile value chain. From yarn manufacturers and fabric producers to processors and garment makers, businesses are struggling to protect margins as cost pressures rise and demand weakens.<\/p>\n \u201cThe MMF segment has been affected very quickly due to the conflict. Petroleum prices have risen sharply, and availability has also emerged as a major challenge,\u201d said Madhu Sudhan Bhageria, Chairman & Managing Director, Filatex India<\/strong>.<\/p>\n Bhageria explained that the biggest issue facing the MMF industry is the steep rise in polymer prices, even though the government has taken steps such as reducing customs duty on key petrochemical inputs. \u201cPolymer prices have increased significantly, even though the government has reduced customs duty. At the same time, buying activity has declined drastically, as market sentiment remains cautious,\u201d he said.<\/p>\n US textile and apparel imports from India fell 28.7 per cent in February 2026 compared to February 2025 (see Table 1).This combination of price inflation and demand hesitation has created a difficult environment for manufacturers, who are caught between rising input costs and unwilling buyers. Many buyers, both domestic and overseas, are holding back on fresh procurement due to fears that prices may soften once the conflict subsides.<\/p>\n \u201cFabric and garments are products that consumers can postpone purchasing for a short period. Demand is unlikely to disappear entirely, but it is being deferred,\u201d Bhageria noted.<\/p>\n Table 1: Month wise imports of Textiles & Apparel by ISA (US $billion)<\/p>\n Courtesy: CITI<\/em><\/p>\n Buyers delay, demand slows<\/strong><\/p>\n The conflict has triggered a visible drop in buying activity, with many buyers adopting a wait-and-watch strategy. With uncertainty around how long the war will continue, and whether crude-linked prices will fall once the situation stabilises, buyers are unwilling to commit to large volumes.<\/p>\n \u201cBuyers are hesitant because they fear that once the conflict ends, prices may fall, leaving them with high-value inventory,\u201d Bhageria said.<\/p>\n He noted that while retail impact may be relatively limited for now, every stakeholder in the textile chain is worried about margin erosion. \u201cYarn manufacturers are worried about profitability, followed by fabric manufacturers, processors, and then retailers,\u201d he said.<\/p>\n Another key challenge is the nature of textile consumption itself. Fabric and garments are not immediate necessities and are often postponed during uncertain times, particularly when consumers are already facing inflationary pressure in essential categories.<\/p>\n \u201cIn war-like situations, consumers tend to cut discretionary spending, and fabric and garments are among the categories that can be postponed easily,\u201d Bhageria said.<\/p>\n The same sentiment was echoed by Suketu Shah, CEO, Vishal Fabrics<\/strong>, who argued that textiles tend to fall low on consumer priority lists during economic uncertainty.<\/p>\n \u201cFabric is the last priority for anybody. First is definitely food, grains, gas, power and transportation,\u201d Shah said.<\/p>\n Shah also questioned claims of any meaningful surge in domestic demand, stating that while festival and occasion-based buying may help liquidate some existing inventories, it is not strong enough to drive fresh production cycles.<\/p>\n \u201cThere are certain segments where definitely there is still a movement because of the marriage season. Recently, Eid also went up. So those festival buying and occasion buying, that is there, but that would help out to liquidate the inventories at different places. I don’t think the new production would be taking place,\u201d he said.<\/p>\n Similarly, Ashish Bhatnagar, CMO, LNJ Denim, RSWM<\/strong>, said demand has not collapsed yet but new order confirmations have slowed, especially on the export front.<\/p>\n \u201cWhatever businesses were booked before the war, those are currently being supplied. But\u2026the new orders are slightly on hold. The confirmations are not happening because the prices which we are demanding, the market is not able to absorb,\u201d Bhatnagar said.<\/p>\n He added that if the situation continues into the next few months, the impact could become more visible during peak production months. \u201cIf this war continues further for two, three months, then we might have some impact maybe in June till May,\u201d he said.<\/p>\n Energy costs surge<\/strong><\/p>\n While raw material inflation is hitting MMF producers directly, rising energy costs are emerging as a major disruption affecting all textile segments. Textile manufacturing is highly energy-intensive, and cost escalation in fuel and power directly impacts profitability and global competitiveness.<\/p>\n According to Rajiv Ranjan, President, TAI Mumbai Unit<\/strong>, energy cost has become the single biggest war-driven disruption for Indian textiles.<\/p>\n \u201cAmong all the disruptions, rising energy cost has been the single biggest challenge for the textile industry,\u201d Ranjan said.<\/p>\n He explained that energy accounts for 15 to 20 per cent of production cost across spinning, weaving, processing, and finishing. With crude oil and natural gas prices fluctuating sharply due to geopolitical instability, electricity, fuel, and transport costs have risen, affecting every stage of manufacturing.<\/p>\n \u201cThis increase affects every segment of the textile value chain, especially processing units, which require large amounts of steam and thermal energy,\u201d Ranjan said.<\/p>\n Bhatnagar reinforced this concern from an operational standpoint, particularly in processes dependent on gas. He said polyester prices have risen sharply due to higher fuel costs, and the cost of gas has multiplied.<\/p>\n \u201cThe entire supply chain is impacted because of the increase in prices on fuel. Because of it, the polyester prices have increased,\u201d he said.<\/p>\n Highlighting the severity of the issue, he added: \u201cThe costs have gone up by almost three to four times, talking about the gas prices.\u201d<\/p>\n Bhatnagar noted that while his company has managed operations so far, the impact is already visible. \u201cWe had a half-day shutdown because of this,\u201d he said.<\/p>\n Manufacturers are trying to negotiate with suppliers and customers to share the burden of higher costs, but the ability to pass on the full increase remains limited.<\/p>\n \u201cWe have been able to increase some prices, but still we are not able to realise the entire cost impact. We are taking a hit just to keep the momentum going on and keep the production going on,\u201d Bhatnagar said.<\/p>\n Shah also pointed to the role of cost inflation in disrupting business planning, stressing that the biggest damage has come from unpredictability.<\/p>\n \u201cThe biggest impact is uncertainty\u2026 neither the raw material nor the selling portion of it,\u201d Shah said.<\/p>\n He added that the cost increase has been significant in absolute terms. \u201cThe price rise which has happened is to the tune of almost\u2026Rs 30 to 40 a meter,\u201d he said.<\/p>\n Logistics disruption<\/strong><\/p>\n Beyond cost inflation and demand uncertainty, exporters are also facing logistics disruptions. Shipping routes have been impacted due to geopolitical risk, leading to longer transit timelines, higher freight costs, and increased working capital pressure.<\/p>\n Ranjan said shipping disruptions have forced vessels to take longer alternative routes, significantly increasing delivery times.<\/p>\n \u201cThis has increased transit times by about 12 to 15 days in several cases,\u201d he said.<\/p>\n Freight costs have also surged sharply. \u201cFreight costs have also increased\u2026in some cases by 80 to 100%,\u201d Ranjan noted.<\/p>\n While many buyers recognise that these disruptions are beyond exporters\u2019 control, the delays are still creating pressure, particularly in fashion and seasonal categories where timing is critical.<\/p>\n \u201cMore than penalties, the larger concern is maintaining buyer confidence and reliability,\u201d Ranjan said.<\/p>\n Shah described the freight and insurance situation as a \u201cheavy burden\u201d for the industry, highlighting the uncertainty around goods in transit.<\/p>\n \u201cIt’s too heavy burden on the industries, and there is nobody who is telling the 100 per centguarantee about any goods in transit,\u201d Shah said.<\/p>\n Policy measures<\/strong><\/p>\n To ease the impact on the industry, the government has announced temporary relief measures, including customs duty exemptions on key petrochemical inputs. Industry leaders acknowledge that the duty reduction has provided some immediate relief, but argue that the time window is too short and structural issues remain unresolved.<\/p>\n Bhageria confirmed that duty benefits have reached downstream users.<\/p>\n \u201cYes, the benefit has been passed on. Producers have passed it on to us, and we have reduced our prices accordingly,\u201d he said.<\/p>\n However, he warned that the government\u2019s announcement of duty relief for only three months is insufficient for import-dependent industries, where procurement and shipment cycles take time.<\/p>\n \u201cThe measures taken by the government are positive, but they have been announced only for a three-month period. In import-dependent industries, three months is a very short timeframe,\u201d Bhageria said.<\/p>\n He explained that by the time orders are placed and shipments arrive, nearly two months are already consumed, leaving little real benefit for industry players.<\/p>\n \u201cThis effectively leaves only one month of benefit,\u201d he stated.<\/p>\n Bhageria argued that the duty relief should have been extended for at least nine months or the full financial year, allowing businesses to plan procurement and production more effectively.<\/p>\n \u201cThe government should have taken a longer-term view, at least for the full calendar year,\u201d he said.<\/p>\n Boost domestic supply<\/strong><\/p>\n A key lesson emerging from the crisis is the need for stronger domestic capacity in polyester raw material production. India\u2019s dependence on imports, particularly for PTA and MEG-linked supply chains, has left it vulnerable to geopolitical disruptions.<\/p>\n Bhageria said multiple projects are already underway to expand domestic production.<\/p>\n \u201cYes, two or three plants are already under development. Once they become operational, the raw material issue should ease considerably,\u201d he said.<\/p>\n He said one plant is being developed by GAIL, another by Indian Oil, and another project is expected from Reliance around early 2028.<\/p>\n If the duty relief period had been extended through the financial year, it would have aligned better with these capacity additions.<\/p>\n \u201cIf the customs duty benefit had been extended until the end of the financial year, it would have aligned well with these upcoming projects,\u201d he said.<\/p>\n Bhageria also pointed out that MEG production remains structurally challenging because it is largely gas-based and not easily viable in India.<\/p>\n \u201cMEG is largely produced from gas-based feedstocks, and its viability in India is limited. That is why it is primarily sourced from the Middle East,\u201d he said.<\/p>\n Industry strategy<\/strong><\/p>\n With uncertainty persisting, industry leaders believe textile companies must focus on internal resilience rather than relying solely on policy relief. Ranjan said the conflict has accelerated the need for companies to diversify sourcing and reduce energy dependence.<\/p>\n \u201cIf this war situation continues for next few months, what are the top three urgent actions Indian textile companies must take to remain globally competitive? Action 1: Diversify Supply Sources,\u201d he said.<\/p>\n He added that companies must also invest in renewable energy and efficiency upgrades, since energy will remain a key determinant of competitiveness.<\/p>\n \u201cWith energy forming 15\u201320 per cent of production cost, companies should invest in renewable energy such as solar and wind, waste heat recovery systems, and alternative fuels like biomass,\u201d Ranjan said.<\/p>\n He also stressed the importance of expanding export markets beyond traditional destinations like the US and Europe.<\/p>\n \u201cCompanies should actively explore newer markets in Africa, Latin America, and Southeast Asia,\u201d he said.<\/p>\n Bhatnagar agreed that companies are focusing on cost optimisation but noted that weak demand makes it harder to invest aggressively.<\/p>\n \u201cWhen demand is weak, the ability to invest or expand becomes constrained,\u201d he said.<\/p>\n He also highlighted that many companies are avoiding long-term commitments on procurement due to uncertainty about price trends.<\/p>\n \u201cNobody is doing long-term contracts\u2026 Whatever is bare essential requirement to run the factories, that is what has been done,\u201d he said.<\/p>\n Shah echoed the need for calm decision-making, suggesting that panic could lead to heavy losses.<\/p>\n \u201cStay back on this patience\u2026 If you panic, you are bound to make losses,\u201d he said.<\/p>\n Export resilience<\/strong><\/p>\n Even amid these challenges, the Indian textile and apparel industry has demonstrated resilience in recent years. Ashwin Chandran, Chairman, Confederation of Indian Textile Industry (CITI)<\/strong>, said exporters managed to contain the decline in FY26 despite facing severe external pressures.<\/p>\n \u201cDespite grappling with a steep 50 per centUS tariff for over five months in the previous fiscal year, it goes to the credit of India\u2019s textiles and apparel exporters that the dip in exports was contained at 2.21 per centin the financial year 2025-26,\u201d Chandran said.<\/p>\n He noted that the data reflects the strength of an MSME-driven sector that continues to operate under narrow margins. At the same time, he said the MMF segment is beginning to align better with global consumption patterns, while cotton textiles remain under stress.<\/p>\n \u201cSimultaneously, the data for FY26 also highlights that the Manmade Fibre (MMF) segment is aligning better with global consumption patterns. However, traditional segments like Cotton textiles are undergoing stress,\u201d Chandran said.<\/p>\n Chandran also flagged the sharp rise in cotton imports as a warning sign of domestic constraints and urged the government to remove import duty on cotton to support competitiveness.<\/p>\n \u201cThe sharp increase in cotton imports at 54.9 per centsignals domestic supply constraints and cost pressures, highlighting the urgent need to remove the import duty on cotton,\u201d he said.<\/p>\n Looking ahead, Chandran said the industry is optimistic due to easing tariff pressures and the potential boost from free trade agreements.<\/p>\n \u201cWith the removal of the punitive US tariff and new opportunities emerging through free trade agreements (FTAs), the textile and apparel industry is optimistic about its prospects,\u201d Chandran said, adding that hopes are linked to \u201cthe growing likelihood of an early easing of turbulence in West Asia.\u201d<\/p>\n Testing the cost structure <\/strong><\/p>\n The West Asia conflict has once again exposed the fragility of global supply chains and the vulnerability of import-dependent sectors. For India\u2019s textile industry, the crisis is not only about rising costs but also about the uncertainty that has stalled buying decisions and weakened market sentiment.<\/p>\n From crude-linked polymer inflation and energy shocks to freight disruption and labour shortages, the industry is being tested on multiple fronts simultaneously. While temporary customs duty relief has provided some cushion, industry leaders believe the focus must shift towards longer-term structural solutions, including GST rationalisation, domestic raw material capacity expansion, and stronger energy efficiency investments.<\/p>\n At the same time, the sector\u2019s resilience remains visible. Companies are collaborating across supply chains, buyers are largely accommodating unavoidable delays, and policymakers are responding with short-term relief measures.<\/p>\n For now, manufacturers remain on edge\u2014hoping for a quick resolution, while preparing for prolonged uncertainty if geopolitical turbulence continues.<\/p>\n <\/p>\n The post Cost Under Fire<\/a> appeared first on Indian Textile Journal<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" The West-Asia conflict has been a wake-up call for Indian textile industry, as the cost has gone up exposing vulnerabilities<\/p>\n","protected":false},"author":1,"featured_media":5633,"comment_status":"open","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","footnotes":""},"categories":[11,13,30],"tags":[550,1326,1465,281,282,285,224,260,383,1466,32,1407,1408,228,1410,221,208,1467,1411,1468,262,1413,700,347,541,290,1469,1005,1470,270,1471,362,1472,240,1065,31,529,1473,300,1418],"class_list":["post-5632","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","category-others","category-textiles","tag-america","tag-announcement","tag-ashish-bhatnagar","tag-ashwin-chandran","tag-citi","tag-confederation-of-indian-textile-industry","tag-divya-shetty","tag-energy-efficiency","tag-europe","tag-export-markets","tag-fashion","tag-filatex-india","tag-gail","tag-indias-textile-industry","tag-indian-oil","tag-interviews-opinions","tag-lists","tag-lnj-denim","tag-madhu-sudhan-bhageria","tag-manmade-fibre","tag-mmf","tag-mmf-segment","tag-mumbai","tag-next","tag-plants","tag-president","tag-rajiv-ranjan","tag-raw","tag-rswm","tag-spinning","tag-suketu-shah","tag-sustainability","tag-tai-mumbai-unit","tag-textile-industry","tag-textile-value-chain","tag-textiles","tag-trends","tag-vishal-fabrics","tag-weaving","tag-west-asia"],"magazineBlocksPostFeaturedMedia":{"thumbnail":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-150x150.jpg","medium":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-300x274.jpg","medium_large":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire.jpg","large":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire.jpg","1536x1536":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire.jpg","2048x2048":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire.jpg","colormag-highlighted-post":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-392x272.jpg","colormag-featured-post-medium":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-390x205.jpg","colormag-featured-post-small":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-130x90.jpg","colormag-featured-image":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-700x445.jpg","colormag-default-news":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-150x150.jpg","colormag-featured-image-large":"https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-700x600.jpg"},"magazineBlocksPostAuthor":{"name":"Styched","avatar":"https:\/\/secure.gravatar.com\/avatar\/dd12961bc53f4886ed1e087725cc7d1e94ea1ab645b4698e4fdac10b9b4d6ad8?s=96&d=mm&r=g"},"magazineBlocksPostCommentsNumber":"0","magazineBlocksPostExcerpt":"The West-Asia conflict has been a wake-up call for Indian textile industry, as the cost has gone up exposing vulnerabilities","magazineBlocksPostCategories":["Lifestyle","Others","Textiles"],"magazineBlocksPostViewCount":1,"magazineBlocksPostReadTime":13,"magazine_blocks_featured_image_url":{"full":["https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire.jpg",700,639,false],"medium":["https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-300x274.jpg",300,274,true],"thumbnail":["https:\/\/styched.com\/wp-content\/uploads\/2026\/04\/cost-under-fire-150x150.jpg",150,150,true]},"magazine_blocks_author":{"display_name":"Styched","author_link":"https:\/\/styched.com\/?author=1"},"magazine_blocks_comment":0,"magazine_blocks_author_image":"https:\/\/secure.gravatar.com\/avatar\/dd12961bc53f4886ed1e087725cc7d1e94ea1ab645b4698e4fdac10b9b4d6ad8?s=96&d=mm&r=g","magazine_blocks_category":"Lifestyle<\/a> Others<\/a> Textiles<\/a>","yoast_head":"\n![\"\"](\"https:\/\/indiantextilejournal.com\/wp-content\/uploads\/WhatsApp-Image-2026-04-10-at-11.27.30-AM-1-1-400x242.jpeg\")
<\/p>\n