India’s textile and apparel sector witnessed a sharp slowdown in March 2026 as escalating crude oil prices and rising raw material costs — triggered by the ongoing Iran conflict — severely impacted manufacturing activity across key textile categories.  

According to industry data, textile manufacturing contracted by 3.6% year-on-year, while apparel production plunged nearly 14.6%. Segments including readymade garments, blended fabrics, woven cotton fabrics and home textiles recorded significant declines amid mounting operational pressures.  

MUCH MORE

Manufacturers reported steep increases in input costs over the past month:

Cotton yarn prices surged by nearly 20%
Packaging polymers became costlier by 50%
Dyes and chemicals rose around 40%
Paper prices increased by 10%. Citations: ET Dated  01-05-2026.

View

The sharp rise in crude oil prices has directly affected petroleum-based textile inputs such as polyester and synthetic fibres, while disruptions in West Asian shipping routes have increased freight charges, insurance premiums and delivery delays. Industry stakeholders noted that several export consignments were held up due to geopolitical instability. Citation: ET Dated  01-05-2026 

Experts believe the sector is facing a “double squeeze” — weakening global demand alongside rising production and logistics costs. CareEdge Ratings observed that higher freight rates, war-risk insurance and volatile oil-linked input prices are tightening working capital cycles and compressing industry margins.  Citation: ET Dated  01-05-2026

Take a listen

The broader macroeconomic environment is also adding pressure. India’s wholesale inflation rose sharply in March, driven by spikes in fuel and manufactured product prices amid the West Asia crisis. Citation: ToI

Industry analysts warn that if geopolitical tensions persist, India’s textile sector could continue facing subdued production, margin stress and export uncertainty in the coming months.  Citation: ET.
Credits: The article is based on automated generated information by the Internet giving due citations wherever applicable. The content has not edited and reviewed by us.

Visit for more