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Informist, Friday, Mar. 20, 2026

 

By Avishek Rakshit

 

KOLKATA – Amid the military conflict in West Asia, a shortage of containers for transporting raw materials, logistical challenges in shipping finished goods, and volatility in crude prices are expected to weigh on the performance of Indian consumer goods companies operating in the region, according to industry officials.

 

While some Indian fast-moving consumer goods companies export to the West Asian region, others have third-party manufacturing sites there. Some companies have fully owned plants in the Gulf region or set up manufacturing and distribution operations through partnerships. 

 

"The current situation in the Middle East (West Asia) has resulted in disruptions in container movement and logistics. We are closely watching the oil prices as that would impact input costs," a Dabur spokesperson told Informist. "That said, we hope that this will be a short-term issue and may be resolved soon." Dabur has a plant in Ras Al Khaimah, UAE, and earns 12-15% of its annual revenue from West Asia. The plant has been facing disruptions owing to the ongoing conflict in the region.

 

Marico also operates in the West Asian region and Egypt, with the area accounting for 15% of the company's total international business, which roughly comprises 23-25% of its entire operations. However, West Asia has experienced one of the lowest growth rates in Marico's international operations over the past few quarters. As against the 21% on-year growth that Marico registered in the December quarter from its international operations, West Asia and Egypt had the second-lowest growth rate at 17%. 

 

For Emami, which earns 44% of its overseas revenue from West Asia and North Africa, Iraq has been an underperformer, impacting the company's overall global performance in the December quarter. Emami's overseas operations account for 15-18% of its annual revenue. 

 

Industry officials said that although operations in West Asia have been volatile in the past few quarters on account of the conflict in Gaza and the subsequent impact on the Gulf region, the US-Israel invasion of Iran at the end of February has made matters worse. A continued conflict could disrupt operations for an extended period, industry officials said.

 

They said that the blockade in the Strait of Hormuz has resulted in a severe shortage of container availability, which is used to transport raw materials for manufacturing operations. The shortage is primarily due to rising shipping costs, following increases in insurance rates, industry officials said. 

 

Moreover, many cargo ships have been anchored for days in the Persian Gulf and the Gulf of Oman as the Strait of Hormuz remains choked, they said. According to industry officials in the merchant navy, average shipping costs for routes from the US and West Asia to China have risen sharply to nearly $25 million per ship, up from $15 million.

 

"Then there is the rising cost of crude. On one hand, the cost per barrel has risen sharply and is hovering around $110-112 per barrel, and on the other, the cost of ferrying it has gone up, pulling up costs substantially," a senior official with an Indian consumer goods company with a plant in West Asia said. 

 

According to the official, shipping costs of Suezmax tankers – a large-sized crude oil tanker - from West Asia to East Asia have risen from about $5 million to nearly $17 million after the US-Israel invasion of Iran. The shipping cost of the Aframax tanker – a medium-sized oil tanker – on the same route has risen to over $8 million from the previous $3.5 million.

 

"The situation across the region is not conducive to carrying on manufacturing or distribution. Factory workers often hear alerts and sirens and random news of security breaches," another official with an Indian consumer goods company having operations in West Asia said. "This is creating panic and disrupting operations."

 

Industry officials said that even if they brave it out and carry on production, there is an extremely limited supply of vehicles to transport the finished goods. As Iran continues to pound West Asian countries with drones and missiles, transporters are wary of running normal operations, and some have temporarily shut local and cross-border routes, officials said. 

 

"So, even if we produce, how are we going to sell it to the end consumer eventually?" the industry official quoted above said.

 

Industry officials also fear that a prolonged conflict in West Asia may lead to disruptions in India as well, with container shortage impacting the inflow of raw materials and unusually higher crude prices disrupting the entire cost structure of companies. 

 

Although industry officials are unwilling to fathom the extent of the financial impact, they anticipate that revenue from West Asia will be hit hard in the March quarter. If the military action in the region persists, financial performance in India may also be affected by cost pressures. End

 

US$1 = INR 93.71

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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