FMCG companies also anticipate impact on costs due to increase in freight and packaging prices
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Conflict in West Asia has started mounting input cost pressures on consumer product companies. Consumer appliance players expect escalating crude oil prices and freight cost to increase input cost pressures. FMCG companies are also concerned about an increase in packaging cost. Analysts noted that exports to Gulf economies, which include electronics and food products, face shipment risks and demand uncertainty if volatility persists.
Kamal Nandi, Business Head & EVP at Appliances Business of Godrej Enterprises Group, said, “Geopolitical tension in West Asia is beginning to reflect in global commodity markets. Higher oil prices drive up the cost of essential raw materials such as polypropylene, styrene monomer, and ABS, which are fundamental to the manufacturing of refrigerators, washing machines, air conditioners and other appliances. While we are closely monitoring the situation and the potential for further logistics and supply chain disruptions, our immediate focus remains on optimising internal efficiencies to absorb these shocks as much as possible. However, if the upward trajectory of crude and the weakening of the rupee persist, it will put pressure on consumer pricing in the near term.”
Avneet Singh Marwah, CEO, SPPL said, “TV and smartphone makers are already facing RAM shortage. The West Asian conflict is adversely impacting freight costs amidst rupee depreciation leading to increased production costs. This will lead to a hike in prices for consumers. Also, during geopolitical uncertainty, consumers tend to save which can also have some impact on consumer sentiment.”
Facilities abroad
Meanwhile, FMCG companies also anticipate impact on costs due to increase in freight and packaging prices. West Asia serves as one of the key export markets for many Indian FMCG companies, with some of them also having manufacturing facilities located in the region.
Mayank Shah, Vice-President, Parle Products said, “We are closely monitoring the situation as we have a manufacturing facility in Bahrain. Production is running as usual currently. Also, any volatility in crude oil prices leads to higher packaging costs for the FMCG sector besides there are concerns around higher freight costs.”
Naveen Malpani, Partner and Consumer and Retail Industry Leader, Grant Thornton Bharat, noted that an elevated crude directly increases packaging, freight, fuel and other input costs, compressing margins unless offset by pricing power or hedging. “Higher freight and insurance costs are delaying shipments and raising export logistics expenses, impacting segments from textiles to engineering goods. India’s $45–50 billion of non-oil exports to Gulf economies, including electronics, chemicals, food products and gems, face shipment risk and demand uncertainty if volatility persists,” he added.
Meanwhile, Pankaj Mohindroo, Chairman, ICEA said that any disruption in key trade corridors can create short-term logistical challenges as “geopolitical chokepoints” can raise logistics costs and extend transit times, particularly if instability persists.
Published on March 2, 2026