India’s textile industry saw a slowdown in March, with production dropping across important areas like cotton-based products, blended textiles, and ready-made garments due to rising input costs and higher crude oil prices linked to the Iran conflict.

Garment production declined sharply by 14.6% year-on-year, with output of non-knitted falling 14.9% and knitted garments dropping 11%.

Overall textile manufacturing contracted 3.6% during the month, while the home textile segment, led by terry towels, recorded a 6.1% decline.

Within the sector, polyester/viscose blended fabric production fell 13.1% in March, and cotton-based categories also weakened, with woven cotton fabric output down 4.2% and knitted cotton fabrics declining 4%. 

Manufacturers also noted that raw material costs have risen over the past month, with Cotton yarn prices surging by 20%, polymers used in packaging becoming 50% costlier, paper prices increasing by 10%, while dyes and chemicals recorded a steep 40% rise.

Industry players also flagged supply chain disruptions, noting that West Asia remains a key market for India, with several shipments delayed or held up during the month, thereby impacting overall trade flows.

Volatile crude prices amid geopolitical tensions are likely to keep margins under pressure and constrain output.