This post was originally published on The Economic Times
The escalating conflict in West Asia, involving the US, Israel and Iran, is beginning to impact export-oriented clusters in Uttar Pradesh, with micro, small, and medium enterprises (MSMEs) in leather, carpets, textiles, and handicrafts grappling with challenges like rising input costs, shipment delays, and tightening liquidity.
Although direct trade exposure to West Asia may be limited for some, voices from MSME-based industrial hubs, such as Agra, Bhadohi, and Lucknow, emphasised that the disruption of critical maritime routes and petrochemical supply chains is causing a lot of stress.
At the core of the disruption is a sharp spike in input costs, particularly for sectors dependent on petroleum-based materials. Puran Dawar, Northern Regional Chairman of the Council for Leather Exports and President of the Agra Footwear Manufacturers and Exporters Chamber, said that key raw materials—such as man-made leather and soles made of thermoplastic rubber (TPR), ethylene vinyl acetate (EVA) and polyurethane (PU), all petroleum derivatives—have seen prices rise by nearly 30% since the beginning of the recent West Asia war.
Freight and logistics disruptions linked to the
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