Exporters supplying goods for the Christmas shopping season to the US and Europe are facing a fresh round of supply chain challenges, as the ongoing West Asia crisis pushes up freight rates, stretches shipping routes, and significantly increases working capital requirements.
Traditionally, India’s Christmas-bound exports to the US are led by textiles and apparel, home textiles, carpets, footwear, fashion accessories, handicrafts and gems and jewellery, with manufacturers typically shipping orders several months ahead of the holiday retail season.
Between June and September, Indian exporters usually ship Christmas-season orders to the US and Europe. Geopolitical tensions, however, have caused supply chain disruptions, longer transit times, and higher logistics costs this year.
Notably, the US is India’s largest export destination, accounting for goods exports worth over $86 billion in FY25, according to government data. The concern this year is not a collapse in orders but the rising cost and complexity of fulfilling them. Industry officials, across home textiles, footwear, and carpets, said demand for Indian products remains relatively healthy ahead of the holiday season. However, longer transit times, rising raw material prices, and delayed payment cycles are forcing exporters to commit more capital while earning thinner margins.
Costs rise and cash gets locked
According to Vikas Singh Chauhan, Director of the HomeTextile Exporters Welfare Association (HEWA), exporters are dealing with simultaneous pressure from higher input costs and logistics disruptions. “Raw material prices have increased significantly, a 20-70% difference, resulting in a substantial rise in the working capital required to execute the same volume of orders,” Chauhan said.
Notably, the US remains the largest market for Indian home textile exports, accounting for 59% of outbound shipments in FY24 and 56% in the first nine months of FY25, according to a recent ICRA ratings report. Chauhan said the shipping environment has changed dramatically over the past few months. “Simultaneously, transit times have extended considerably. Shipments to Europe now take nearly 60 days compared to the earlier 24-40 days accompanied by a sharp increase in sea freight costs, about 15-30%.”
