Middle East tensions hit Ludhiana Hosiery Industry hard; Costs surge, exports slow down
Sukhminder Bhangoo
Ludhiana (Punjab), April 6, 2026: Escalating tensions between Iran, Israel and the United States are beginning to take a serious toll on India’s textile hub, with Ludhiana’s renowned hosiery industry facing a deepening financial crisis.
Often referred to as the “Manchester of India,” Ludhiana’s garment sector is grappling with rising input costs, disrupted supply chains, and declining export orders, pushing many businesses toward a profit squeeze.
The surge in crude oil prices triggered by geopolitical tensions has sharply increased the cost of petroleum-based products. Polyester yarn prices have jumped from ₹115 to nearly ₹165–170 per kg—an increase of around 40%. Cotton yarn has also seen a rise of 10–20%.
Additionally, dyes, finishing chemicals, and plastic packaging materials have become 30–40% more expensive, significantly raising production costs for manufacturers.
Global trade routes, particularly through sensitive regions like the Strait of Hormuz and the Red Sea, have been affected by security concerns.
Freight and insurance costs for shipping containers have surged by 20–30%, while international buyers remain hesitant to place new orders. Existing shipments are also facing delays, leaving factories burdened with unsold stock.
Rising inflation and increased energy costs, especially LPG and gas shortages, have further strained operations. Many factory owners report slowing down production due to high running costs.
At the same time, migrant workers are beginning to return to their hometowns amid reduced work opportunities and rising living expenses, leading to a drop in production capacity.
Industry experts warn that if the geopolitical situation continues to worsen, Ludhiana’s hosiery sector could face prolonged recessionary pressures, impacting thousands of businesses and livelihoods.