Indian apparel exporters are bracing for delays and higher costs on shipments to the UAE, their fourth-largest market, as tensions in West Asia threaten to disrupt key sea routes.
Exporters say even a modest rise in freight and insurance could squeeze the already thin margins and make it harder to meet contracts.
“Any escalation in logistics and insurance costs due to the West Asia scenario puts us in a very tight spot,” said Confederation of Indian Textile Industry chairman, Ashwin Chandran. A senior executive at a leading apparel exporter, who declined to be named, said key meetings with Middle East buyers have been cancelled in the middle of the shipping season. “Orders are under execution. If the Red Sea closes, logistics costs will rise and turnaround time could increase by 15-20 days,” the executive said.
The Gulf Cooperation Council (GCC) comprising Saudi Arabia, UAE, Oman, Qatar, Bahrain and Kuwait remains a key trade and economic partner for India, particularly for apparel. India’s apparel exports to the GCC stood at USD 1.8 billion in FY25. “Coming in the backdrop of the continuing uncertainty on the US tariffs issue and the recent reduction in the rates under the Remission of Duties and Taxes on Exported Products Scheme, the tumultuous developments in West Asia have further added to the challenges faced by Indian textile and apparel exporters,” Chandran said. “Considering the narrow margins under which textile and apparel exporters operate, any escalation in the cost of logistics and insurance due to the West Asia scenario puts them in a very tight spot, affecting their ability to meet contractual obligations besides significantly raising operating costs,” he pointed out.Vinod Thapar, chairman of Knitwear Club in Ludhiana, said that the Middle East is among the most important overseas markets for knitwear products.>
