Asia: Ongoing supply chain disruptions increase production prices, as suppliers absorb the cost amid uncertain order volumes
"South Asian apparel leaders fear fallout from ongoing US-Israel-Iran conflict", 23 March 2026
As the conflict continues, leaders from the apparel industry in India, Bangladesh and China have shared their concerns with Just Style...
“From every point of view, we are very concerned,” Chandrima Chatterjee, secretary general of Confederation of Indian Textile Industry told Just Style...With the UAE’s immediate shipping lanes and airspace under threat since the US and Israel attacked Iran...
“Industry is reporting huge impact and disruptions now”, she added, stressing that one main concern is the availability of polyester, with raw material prices also going up: “With polyester production declining, cotton prices may also get impacted soon.”
Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India (CMAI), and a past association president, said: “If I were supplying to a Middle Eastern country, I would certainly hold back my supplies and strengthen my payment guarantees. I don’t see any immediate collapse happening, but the market demand in the Middle East will be impacted.”
On energy costs, the Indian textile industry scores over many of its competitors because of the indigenous coal-based electricity generation and a strong domestic supply chain...
Moreover, many Indian textile companies also use wind and solar energy...
Bangladesh
...Rezwan Selim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said his country’s key clothing and textile outsourcing centre is already feeling the impact of the conflict’s supply chain disruption, through rising costs and growing uncertainty for international buyers...
Energy price rises increase the cost of key inputs, particularly artificial fibres, such as acrylic and viscose, he stressed: “All our supply chain costs are going up. But for orders already placed, buyers are not adjusting prices, so manufacturers have to absorb the losses.”
Factories are currently working on orders for which raw materials were already secured. However, recently placed orders will be more difficult to manage, as input costs have increased and buyers are unlikely to adjust prices.
“Production should continue for the next two to three months, but we may face challenges for orders scheduled for May, June and July,” predicted Mr Selim.
“We are in discussions, but most buyers say they cannot adjust current orders. There may be some flexibility for future orders.”
China
...an extended conflict will hurt through depressing export demand, according to an analysis paper by Bruegel...
...with China sourcing around half of its crude and 30% of its liquified natural gas from countries that use the Strait of Hormuz...“a sustained closure of the Persian Gulf risks shortages, skyrocketing freight and insurance costs, and sparking fierce competition for rerouted cargoes,” she continued.
That effective blockade could increase upstream costs for chemical fibres and textile raw materials in China...
China’s textile and apparel exports are still at risk, however, according to Huarui Information...
Its research paper shows the US accounted for 15% of China’s textile and apparel exports in 2025, followed by the European Union (EU) at 14%, with exports generally shipped via the Suez Canal, which is also close to the conflict zone
Such shipments could reroute via the Cape of Good Hope, “but this would result in higher freight costs and longer transit times, affecting procurement and order placement,” the study noted...