Trump war keeping global economy edgy
Domino effect: Surcharges, longer routes push up cost for apparel exporters
Multiple headwinds as West Asia battle rages
Doing a quick math; The brake out of US Iran war/ conflict in West Asia is driving up costs/upward risks to input costs for India’s apparel exporters, adding as per trade estimates as much as Rs 12 and Rs 55 for every single garment exported on account of longer shipping routes/delayed shipments and war-related surcharges, according to estimates by the Apparel Export Promotion Council (AEPC).
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Notwithstanding all the aforementioned factors some orders are on the hold/ some exceptional cases force majeure clause is also been invoked so situation is gone all over the place
West Asia is an important export destination for apparel merchandise exports especially in the context of latest FTAs adding momentum to the export volumes. Though government continues to be sanguine on Indian economy's resilience (no reason to panic is the message given by Piyush Goyal very recently) which gives a heart that 'this shall also pass'.
Clouding the outlook
“A potential decline of apparel export orders to West Asia may happen over the next few months. Due to war, apparel consumption may decline and brand confidence will be impacted, which will lead to a decline in apparel export orders,” AEPC said on Sunday.
Adding to woes
The increase comes as shipping companies impose an Emergency War Surcharge (EWS) on cargo moving to Gulf countries. AEPC said the surcharge raised container costs by about $1,200 per 20 foot container, increasing the cost of individual garments depending on the product category.
Nuances
As per trade estimates “For instance, in a 20-foot container, the surcharge can add to about Rs 12 per shirt, Rs 18 per trouser, Rs 37 per ladies’ dress, Rs 43 per 2-piece suit, and Rs 55 for a winter coat, the industry body’s estimates show. Shipping disruptions also added to the pressure as shipping companies suspended vessel crossings through the Strait of Hormuz and the Red Sea, forcing cargo to be re-routed or rescheduled”.
Scenario Prognosis: Sad state of affairs
Fasten your seat belts; FIEO Director General & CEO Ajay Sahai projects significant short-term distress for Indian exports to the Middle East, particularly due to rising freight/insurance costs and rerouting.
Prices weigh: Input costs make goods expensive
Exporters said many shipments are now being diverted around the Cape of Good Hope, which adds nearly 6,500 km to the journey and delays deliveries by 10 to 15 days, raising fuel and insurance costs.
Market perspective
West Asia remains an important market for India’s ready-made garments, accounting for nearly 11.8% of the country’s apparel exports. Data from the Directorate General of Commercial Intelligence and Statistics (DGCI&S) shows India exported garments worth about $1.9 billion to West Asian countries in the previous financial year.
Situation is far from healthy: Powerplay
“A potential decline of apparel export orders to West Asia may happen over next few months. Due to war, apparel consumption may decline and brand confidence will be impacted”
— Apparel Export Promotion Council.
When going is tough tough gets going
With no end in sight to the conflict given the dynamic nature of the developing story no scenario building/ modelling is working out in the most unprecedented situation arguably we have not seen in our lifetime. So the industry needs to up their ante to navigate out of troubled waters.
Need of the hour Policy alignment to facilitate sustainable and inclusive sector growth to unlock industry’s firepower/animal spirit!
Credits: This article is using text from TOI edition dated 16-03-2026. The content has been “edited in parts”.
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