“What We Are Witnessing Today Goes Beyond a Temporary Logistics Disturbance.”
May 18, 2026 | By Textile Sphere India
As geopolitical tensions reshape global trade dynamics, the textile and apparel industry is confronting rising logistics costs, supply chain disruptions, and increasing uncertainty around exports and sourcing. In this interview, Kapil Pathare, Deputy Managing Director, VIP Clothing, discusses how the West Asia conflict, Red Sea disruptions, and shifting global trade priorities are accelerating a structural realignment of supply chains.
Are current disruptions a temporary logistics shock, or do you see a structural rewiring of global supply chains—and where does India realistically fit in that shift?
KP: What we are witnessing today goes beyond a temporary logistics disturbance. In my view, the global textile, apparel, and innerwear industry is entering a phase of structural supply chain realignment.
Over the last few years, businesses globally have faced one disruption after another — pandemic-led shutdowns, container shortages, inflationary pressure, geopolitical conflicts, and now prolonged instability in West Asia affecting shipping routes and global trade movement. The industry has realized that depending excessively on one geography or one shipping corridor creates long-term vulnerability.
In the innerwear and apparel industry, speed-to-market and inventory planning are critical. Unlike heavy industrial products, fashion and apparel categories work on shorter selling cycles, seasonal demand patterns, and high-volume replenishment models. Delays of even 15–20 days impact retailer planning, stock availability, and working capital cycles.
The recent Red Sea disruptions and rising uncertainty around major trade routes have forced global brands to rethink sourcing strategies. Earlier, buyers focused primarily on low-cost manufacturing. Today, reliability, flexibility, political stability, and supply continuity have become equally important.
This is where India has a realistic opportunity.
India possesses a unique advantage because it offers a complete textile ecosystem — from fibre, yarn, and fabrics to garmenting and branded products. In the innerwear category specifically, India has built strong manufacturing capabilities with increasing emphasis on product quality, automation, innovation, and large-scale production.
However, India must also acknowledge its limitations honestly. Competing countries like Vietnam and Bangladesh continue to enjoy trade advantages and faster export turnaround systems. If India wants to become a stronger “China Plus One” destination, we need to improve logistics efficiency, port turnaround times, policy consistency, and manufacturing agility.
India’s role in the future supply chain shift will not be about replacing China entirely. It will be about becoming a dependable, diversified, and resilient sourcing partner for global brands looking to reduce concentration risk.
How much of the increased cost—freight, insurance, energy—can companies absorb before it starts hitting consumer prices or export competitiveness?
KP: The textile and innerwear industry operates on highly competitive margins, especially in mass and mid-premium categories. Over the last several months, companies have been absorbing substantial increases in freight costs, shipping insurance premiums, fuel costs, and energy expenses.
In the innerwear industry particularly, pricing sensitivity is extremely high because volumes are large and products are often part of daily essentials. Consumers are value-conscious, while retailers and distributors expect stable pricing structures. This creates pressure across the entire supply chain.
For organized players, there is some capacity to temporarily absorb rising costs through:
- Better supply chain planning
- Operational efficiencies
- Vendor negotiations
- Automation and productivity improvements
- Inventory optimization
However, there is a clear threshold beyond which companies cannot continue absorbing cost inflation internally.
When freight costs rise sharply and energy costs remain volatile, eventually it starts impacting:
- Product pricing
- Retail margins
- Consumer affordability
- Export competitiveness
For export-oriented apparel businesses, even a small increase in landed cost can shift orders toward competing countries. Global buyers continuously benchmark pricing across India, Bangladesh, Vietnam, and Turkey. If Indian exporters become structurally expensive due to logistics and operational costs, order migration becomes a real possibility.
Domestically too, sustained inflation affects consumer sentiment. In categories like innerwear and fashion apparel, companies often face a difficult balancing act — maintaining product quality and brand positioning while controlling price increases.
The challenge today is not only rising costs but unpredictability. Businesses can plan around stable costs. What becomes difficult is operating in an environment where freight, transit timelines, and energy pricing fluctuate continuously.
Have recent tensions in West Asia changed how companies assess geopolitical risk, and are boards now factoring this into long-term investment decisions?
KP: Absolutely. Geopolitical risk is no longer seen as a distant macroeconomic issue. It has now become a boardroom-level strategic concern.
In earlier years, investment discussions in the apparel and innerwear sector revolved around expansion capacity, consumer demand, market penetration, and manufacturing efficiency. Today, leadership teams are equally discussing:
- Supply chain resilience
- Route dependency
- Inventory risk
- Alternate sourcing strategies
- Energy security
- Multi-country vendor ecosystems
The recent tensions in West Asia have highlighted how deeply interconnected global manufacturing and logistics systems have become.
For example, delays in shipping routes immediately affect raw material movement, export deliveries, retailer inventory cycles, and seasonal merchandise planning. In fashion and apparel categories, timing is critical. Missing a retail season due to shipment delays can directly impact revenues.
As a result, many companies are now:
- Building higher inventory buffers
- Exploring alternative ports and shipping routes
- Diversifying sourcing dependencies
- Investing in digital supply chain tracking
- Strengthening domestic manufacturing capabilities
Boards today understand that profitability alone cannot define long-term sustainability. Resilience and continuity planning have become equally important business priorities.
This shift in mindset may ultimately become one of the biggest long-term outcomes of the current geopolitical environment.
What specific sectors stand to lose the most from delays in the India–US+ trade agreement, and is industry recalibrating expectations from that partnership?
KP: The sectors likely to be most impacted include:
- Apparel and garments
- Innerwear and athleisure
- Home textiles
- Technical textiles
- Leather and footwear
- MSME-driven export categories
These industries are labour-intensive and highly dependent on export competitiveness.
In apparel and innerwear, global sourcing decisions are extremely price-sensitive. Competing countries already benefit from preferential trade access in several Western markets, giving them tariff advantages over Indian exporters.
Indian manufacturers have improved significantly in terms of quality, compliance standards, innovation, and production capability. However, without stronger trade agreements and tariff support, competing globally becomes more challenging.
That said, industry expectations today are becoming more balanced and realistic.
Businesses now recognize that trade agreements alone cannot transform export growth. India must simultaneously strengthen:
- Logistics infrastructure
- Manufacturing productivity
- Ease of doing business
- Port efficiency
- Supply chain speed
- Labour skilling and technology adoption
Global buyers today value reliability and execution consistency alongside pricing.
In the innerwear and apparel sector specifically, there is also growing demand for sustainable manufacturing, ethical sourcing, and faster replenishment cycles. India has the potential to become a preferred sourcing destination if these strengths are supported by better trade competitiveness.
The opportunity remains strong, but execution speed will be critical.
Are Indian companies genuinely diversifying supply chains, or are we seeing short-term adjustments rather than a deep structural shift?
KP: Currently, I believe Indian industry is somewhere between tactical adaptation and long-term transformation.
Many companies have certainly started taking corrective measures:
- Multi-vendor sourcing
- Alternate shipping routes
- Regional warehousing
- Higher inventory planning
- Flexible manufacturing strategies
- Expanded domestic sourcing networks
However, deep structural diversification takes time.
Building resilient supply chains requires long-term investment in supplier ecosystems, manufacturing infrastructure, technology integration, and logistics modernization. It cannot happen overnight.
In the innerwear and apparel sector, where speed, consistency, and scale are essential, companies are becoming more cautious about overdependence on single geographies or single sourcing models.
One positive development is that Indian businesses are becoming more globally aware and strategically mature in how they approach risk management.
The mindset is slowly shifting from: “Lowest cost manufacturing” to “Most reliable and resilient manufacturing.”
That transition is important for the long-term future of Indian textiles and apparel.
If India can combine scale, speed, product innovation, compliance, and supply chain reliability, the country has the potential to emerge as a much stronger global textile and apparel hub over the next decade.
#TAGS geopolitical tensions, global trade dynamics, textile and apparel industry, rising logistics costs, supply chain disruptions, Kapil Pathare, VIP Clothing, West Asia conflict, shifting global trade priorities, structural realignment of supply chains,