Dollar Town on Edge: How the West Asia War is Hitting India's Knitwear Capital

Added: 2026-05-11

[00:00:06]A t-shirt rolling off a factory floor in Tiruppur, packed into a container, bound for London, New York, or Sydney. This town, often called India's dollar town, accounts for nearly 70% of the country's knitwear exports. A $5 billion export ecosystem supporting over a million jobs.

[00:00:27]But today, thousands of kilometers away from the factory floors, here the conflict in West Asia is beginning to alter the economics of this export town.

[00:00:36]We're here in Tiruppur to assess how the conflict [music] in West Asia is beginning to impact one of the country's largest textile clusters.

[00:00:45]Tiruppur is home to over 5,000 textile units that fall within various stages of the supply chain, from dyeing to processing to weaving and stitching. In 2025, this industry exported around 68,000 crore rupees worth of knitwear.

[00:01:00]One of the biggest hits from the West Asia conflict, they say, arises from an acute shortage and a doubling of prices of commercial liquefied petroleum gas, which is essential for processing and dyeing processes that give a garment its color, finish, and form.

[00:01:17]Commercial cylinders, uh we sell Earlier, it was a 2,000 rupees for 19 kilo cylinder. Now it is 4,000, almost double.

[00:01:25]And uh the main thing is even if you're ready to pay it, we are not able to get it on time. We are working for a very thin margin. We can say around 5 to 10% margin we are working. And uh this margin will be totally affected by recent days of uh petroleum products shortage.

[00:01:41]And uh the because of the petroleum product, we are not able to get the accessories like your poly bags, hangers.

[00:01:46]And some of LPG also we are using as a fuel for the fabric processing. Fabric is a 60% of our garment value. And if you are delayed in the fabric, the fabric price is increased. A sharp rise in yarn prices is another pain point that's directly hurting India's competitiveness in global markets.

[00:02:05]Last 15 days, the biggest problem is uh yarn price increase. It's about 20 to 25% there's an increase. We have made a request to the government of India that they should remove the custom duty of 11%. That will help us out with because the cotton is hoarded by multinational companies.

[00:02:32]The uncertainty in the export markets is also being felt down the chain on factory floors. Manufacturers say the conflict in West Asia is hurting on multiple fronts, from raw material supplies to competitiveness to access to key markets. The orders to the Middle East are facing some cancellation. The orders to West, that is Europe and US, they're not getting cancelled, but they're getting delayed significantly due to the transit issues. Costs of the raw material have gone up significantly, especially for the synthetic raw materials. They have gone up by 40 to 50%. The cost of shipping, that is for exports, that has gone up significantly because they're circumventing Jebel Ali. So, one container to US used to cost, let's say, $2,000, now it costs $6,000. The manufacturers are losing their margins, and they were absorbing it for a while, but now eventually they'll have to pass it on to the consumers. For synthetic apparel, the price will go up by 20%, 15 to 20%. For cotton apparel, it should go up by 5 to 10%.

[00:03:25]Companies in Tiruppur warn that the impact is beginning to spill beyond their balance sheets into the homes of their workers. A lot of migrant workers work here in Tiruppur, and they cook themselves, they buy commercial LPG, they don't have access to normal LPG.

[00:03:40]The price of that has gone up significantly, hurting their pockets, and they are feeling the pinch.

[00:03:53]The 1,000 purchase of that >> Let's say that this would be a body blow to an industry whose recovery from the pandemic has been interrupted multiple times already by events like punitive US tariffs. They hope government aid will be quick and substantial.

[00:04:16]For now, there are still no signs of immediate de-escalation in West Asia.

[00:04:21]While back channel conversations between Iran and the US continue and global markets remain hopeful of a diplomatic pause, uncertainty around region's shipping and energy corridors persist.

[00:04:32]Exporters here in Tiruppur are continuing production. Workers are still on factory floors and orders [music] are still moving. But every escalation in the conflict is now immediately reflected in freight bills, fuel costs, and manufacturing margins. And until there is greater clarity on the geopolitical front, India's textile exporters say that this may remain a story of resilience, but also one of rising vulnerability.

[00:04:56]With camera person Saroj Singh in Tiruppur, Ashwarya Anand for CNBC-TV18.

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