The US Iran war has evolved from a regional geopolitical event to a global crisis for the textile and apparel industries. As global data collectors monitor the kinetic aspects of the Iran war, the war’s spillovers are paralysing South Asian manufacturing centres.
The Strait of Hormuz has become an active operational risk and the economic basis of man-made fibers (MMF) is being recalibrated. This report explores the impact of the war on Asia’s polyester producers, the downstream effects on garment manufacturers in India and Bangladesh and the downstream ramifications to retailers such as Inditex (Zara), H&M and Nike.
The Petrochemical Foundation of Fashion
Polyester makes up 59% of the world’s fiber production. Its production is dependent on petrochemicals (Purified Terephthalic Acid (PTA) and Monoethylene Glycol (MEG)) extracted from refined oil. The virtual blockade of the Strait of Hormuz has shut down a shipping route for 20% of the world’s oil and LNG, turning an energy crisis into a feedstock crisis.
The Naphtha Shock (April 2026 Data)
The impact on naphtha, the key feedstock for making synthetic fibres, has driven refining margins to soar.
| Feedstock / Product | Pre-War (Feb 2026) | Post-War Peak (April 2026) | Trend Analysis |
| Crude Oil (Brent)
| $75/barrel | $120/barrel | 60% Surge |
| Naphtha Crack Spread (Asia) | $108/ton | $400/ton | 270% Spike |
| PTA/MEG Melt Price (India)
| 83 INR/kg | 118 INR/kg | 42.1% Spike |
| Polyester Staple Fibre
| 100 INR/kg | 126.5 INR/kg | 26.5% Spike |
India’s Midstream Crunch: Surat Textile Hub
India, the world’s second-largest polyester manufacturer, is in industrial distress. In the textile hub of Surat, the country’s textile capital, the hub’s 60 million meters of daily production has collapsed.
- Manufacturing Grinds to a Halt: At companies such as Radheshyam Textile, 50% of industrial looms are inactive.
- Eroding Margins: Firms such as Filatex India claim a 30% increase in feedstock costs, but they can only pass on two-thirds of the cost to the consumer due to competition.
- Labor Exodus: A shortage of LPG (cooking gas), 90% of which is imported via Hormuz, has led to an exodus of thousands of migrant workers from Gujarat, leaving a gap.
Retailer Resilience: Fast Fashion Under Fire
The world’s retailers are currently insulated by forward buying, but this is a “timebomb”.
- Zara & H&M: Both heavily dependent on Asian fabric manufacturers. H&M is currently seeking to absorb price hikes, but “demand destruction” is predicted if consumer prices climb to cover cost increases.
- Nike & Footwear: Synthetic sneakers contain more than 70 petrochemical parts. The Footwear Distributors and Retailers of America (FDRA) predicts a 1.5% to 3% price increase for consumers by late summer 2026.
- Bangladesh’s Cotton Conundrum: Bangladesh is a cotton-centric economy, but polyester is used for threads and accessories. Coats Bangladesh has already declared a 15.5% hike in April 2026.
The Government’s Tariff Twist
The Government of India took the following fiscal interventions on April 1, 2026, to ease the crisis:
- Customs Duty Exemption: 100% duty waiver on about 40 petrochemical products (such as PTA, MEG and PVC) until June 30 2026.
- Fuel Subsidies: 10 INR per liter reduction in excise duties on petrol and diesel.
- Duty on Exports: High duties on diesel and aviation fuel exports to secure supplies.
Looking Ahead: Building Resilience
The 2026 Polyester Shock has highlighted the weakness of “just-in-time” production. The industry is rapidly making several changes to survive:
- Uncoupling from Oil: Diversified moves toward Recycled Polyester (rPET) to reduce oil price risks.
- Route Optionality: Logistics diversification to avoid maritime bottlenecks, despite the cost.
- Regionalization: Closer sourcing to consumers to avoid geopolitical risk.
