Impact of Gulf War: Rising Costs and Labor Shortages Hit Indian Manufacturing
War in Gulf: Shoe soles to apparels, input costs surge, labour shortage hurting now
The Indian Express
Image: The Indian Express
The ongoing war in West Asia has severely affected India's manufacturing sector, particularly in footwear and textiles. Input costs have surged, with prices for key materials like polyurethane rubber rising by 50%, while labor shortages are exacerbating production challenges. Companies are struggling to maintain operations amid these pressures.
- 01Input costs for footwear production have increased by 15% due to the war.
- 02The availability of essential materials like mono-ethylene glycol has been disrupted.
- 03Labor shortages are affecting production, with many workers returning home due to cooking gas shortages.
- 04Apparel exports to war-affected regions account for about 11% of India's total garment exports.
- 05Manufacturers are facing significant delays and increased shipping costs due to rerouted transit routes.
Advertisement
In-Article Ad
The war in West Asia has led to a significant increase in input costs for Indian manufacturers, particularly in the footwear and textile sectors. Sudhir Rustagi, promoter director of Ess Aar Universal in Noida, reported a 15% rise in sole production costs, primarily due to a 50% increase in polyurethane rubber prices and disrupted supply chains for mono-ethylene glycol. The footwear industry, which employs approximately 4.42 million people, is experiencing a 25% drop in turnover as companies struggle to operate at half capacity. Labor shortages are also impacting production, with some workers returning home due to cooking gas shortages. The textile sector is facing similar challenges, with prices for poly-ethylene terephthalate (PET) rising by 20-30% and export orders declining significantly. The Indian government is regulating gas supplies to industrial users, leading to fears of further disruptions. As a result, manufacturers are caught between rising costs and the inability to pass these increases onto consumers, threatening the viability of their operations.
Advertisement
In-Article Ad
The rising costs and labor shortages are putting pressure on manufacturers, which may lead to layoffs and reduced production capacity. Consumers could face higher prices for footwear and apparel as companies struggle to manage increased input costs.
Advertisement
In-Article Ad
Reader Poll
How should manufacturers respond to rising input costs?
Connecting to poll...
Read the original article
Visit the source for the complete story.

