Geopolitical Tensions and Trade Barriers Jeopardize India's $100 Billion Textile Ambitions

India's textile industry, the country's second-largest employer supporting over 45 million jobs, is facing a dual crisis as geopolitical instability and trade disputes erode export competitiveness. After a brief period of stability following the reduction of U.S. tariffs in February, the outbreak of war involving the U.S., Israel, and Iran has introduced fresh volatility into the sector. The conflict has severely disrupted the movement of goods through the Strait of Hormuz, driving up freight and energy costs. This has created a ripple effect across the supply chain, with petroleum-based polyester prices surging more than 40% since the start of the war. Manufacturers are now struggling to pass these costs on to customers, leading to a decline in demand. Financial data highlights the struggle: between April 2025 and February 2026, India's exports of cotton, man-made yarns, fabrics, and ready-made garments totaled $29.5 billion, a slight decrease from $29.8 billion in the previous year. While the dip appears modest, it signals a worrying trend for a government aiming for $100 billion in annual textile exports by 2030. Operational impacts have been severe, with some companies, such as Filatex India, cutting production by 25%. Additionally, the industry has faced labor shortages as migrant workers returned to their hometowns due to difficulties securing liquefied petroleum gas for cooking. While a recent ceasefire offers a temporary window of relief, industry leaders remain cautious about inventory risks and the sustainability of demand at higher price points.