How the energy crisis is affecting garment manufacturing hubs

The garment industry is currently navigating a crisis that is less about fashion trends and more about basic survival. As of mid-March 2026, the energy arteries that feed manufacturing hubs in South Asia have all but collapsed under the weight of the West Asia conflict. The closure of the Strait of Hormuz has turned a steady stream of industrial fuel into a trickle, leaving boilers cold and assembly lines silent.

Boiler shutdowns and gas cuts in India

In northern India, the situation is nothing short of catastrophic. In Panipat alone—a town that usually hums with the sound of looms—over 350 dyeing units have been forced to pull the plug. These are not small-scale casualties; these units are the “mother” of the textile sector, preparing the fabrics that feed export houses globally. Nitin Arora, president of the Panipat Dyers’ Association, recently told The Tribune that “more than one lakh (100,000) people are directly or indirectly employed in the dyeing sector are at risk and export houses are also badly affected," as over 150 units in the Sector-29 dyeing cluster have shut down due to the unavailability of commercial liquefied petroleum gas (LPG). The government has suggested switching to biomass, but most factories dismantled their coal-fed thermostats years ago to comply with “green” gas mandates. They are now trapped between a fuel they cannot get and one they are no longer equipped to burn.

In the Faridabad industrial belt in Haryana, where 15,000 MSMEs across the garment and footwear sectors are reeling, the sentiment is grim. Raj Bhatia, president of the Faridabad Industrial Association, noted that the "real impact" is only just beginning as "safety stocks” of fuel and raw materials finally exhaust. When a boiler goes cold, it is not just a machine stopping but thousands of workers—mostly women—whose shifts get cut and wages shrink. Payment delays of 60 days are becoming the norm, thus pushing small businesses to the brink of loan defaults.

In Gujarat’s textile and chemical clusters, the state government has imposed a 50 percent cut on industrial gas usage. This has triggered a 30 to 40 percent surge in the price of basic chemicals and dyes. “Rising manufacturing costs could force weavers to temporarily reduce production,” warned Mayur Golwala, secretary of the Sachin Industrial Society, according to Apparel Resources. He added that if operating under current conditions became financially unviable, weavers might need to halt production for two or three days a week. For a weaver in Surat, a jump in crude oil prices from 73 US dollars to 100 US dollars in a single week is not just a statistic; it is a death knell for margins.

Power blackouts and capacity reduction in Bangladesh

The problem is not confined to India. In Bangladesh, the world's second-largest garment exporter, the energy deficit is threatening to tear the fabric of the national economy. Given that the country sources about 95 percent of its fuel requirements from outside its borders, supply risks are real. According to reports in The Guardian, the government has been forced into desperate measures, including scheduled power blackouts and early Ramadan holidays for universities, just to divert enough diesel to keep garment factories working. However, even these emergency rations are failing. Many factories are now operating at a mere 40 to 50 percent capacity because gas pressure has plummeted from the required 10 PSI to a 1.5 PSI, which is not enough. Thus factories are not only missing deadlines; they are losing the ability to keep their people employed.

Weaving mills shutter doors indefinitely in Pakistan

In Pakistan’s textile heartland of Faisalabad and Karachi, the situation has reached a breaking point as the government struggles to subsidise re-gasified liquefied natural gas (RLNG) amidst a severe foreign exchange crunch. The Dawn recently reported that hundreds of small-to-medium weaving mills have “shuttered their doors indefinitely” due to a combination of 40 percent higher power tariffs and erratic gas pressure that makes consistent fabric dyeing impossible.

Skeletal shifts in Sri Lankan factories

In Sri Lanka, while the economy has shown signs of recovery, the garment sector—the nation's primary export earner—is facing a “double squeeze.” According to The Island, the Ceylon Chamber of Commerce has noted that high electricity costs are forcing factories to operate on skeletal shifts, leading to a migration of orders toward African competitors where energy overheads remain lower.

Unpredictable power supply in Cambodia and Vietnam

Vietnam, an important destination in the global apparel trade, is grappling with load-shedding in its northern manufacturing hubs, a crisis exacerbated by the extreme heatwaves of early 2026 which have drained hydroelectric reservoirs. The Saigon Times highlights that major footwear and garment vendors for global buyers are being asked to “self-regulate” and cut power consumption by 15 percent, leading to expensive investments in diesel generators that erase already thin profit margins.

Meanwhile, in Cambodia, the Garment Manufacturers Association (GMAC) has voiced concerns through The Phnom Penh Post regarding the “unpredictability of the regional grid.”

Global trade redirects in view of energy crisis

The final sting in this energy crisis is the permanent loss of trust. International buyers, spooked by the instability, are already looking for “safer” harbours. A massive rerouting of orders can be observed as brands fear their seasonal collections will be stranded on ships or at airports, according to insiders as quoted in The Federal. If South Asia fails to secure a stable, affordable energy supply within the next few weeks, the reputation of its production hubs that took decades to build may be in jeopardy.