Surcharges, longer routes push up cost for apparel exporters

NEW DELHI: The ongoing conflict in West Asia is pushing up costs for India’s apparel exporters, adding between Rs 12 and Rs 55 for every single garment exported due to longer shipping routes and war-related surcharges, according to estimates by the Apparel Export Promotion Council (AEPC).



“A potential decline of apparel export orders to West Asia may happen over the next few months. Due to war, apparel consumption may decline and brand confidence will be impacted, which will lead to a decline in apparel export orders,” AEPC said on Sunday.

The increase comes as shipping companies impose an Emergency War Surcharge (EWS) on cargo moving to Gulf countries. AEPC said the surcharge raised container costs by about $1,200 per 20 foot container, increasing the cost of individual garments depending on the product category.

For instance, in a 20 -foot container, the surcharge can add to about Rs 12 per shirt, Rs 18 per trouser, Rs 37 per ladies’ dress, Rs 43 per 2-piece suit, and Rs 55 for a winter coat, the industry body’s estimates show. Shipping disruptions also added to the pressure as shipping companies suspended vessel crossings through the Strait of Hormuz and the Red Sea, forcing cargo to be rerouted or rescheduled.

Exporters said many shipments are now being diverted around the Cape of Good Hope, which adds nearly 6,500 km to the journey and delays deliveries by 10 to 15 days, raising fuel and insurance costs.

West Asia remains an important market for India’s ready-made garments, accounting for nearly 11.8% of the country’s apparel exports. Data from the Directorate General of Commercial Intelligence and Statistics (DGCI&S) shows India exported garments worth about $1.9 billion to West Asian countries in the previous financial year.

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