IAF Statement On Current External Shocks

Once again, the apparel industry is facing a major external shock that is likely to drive up input costs, reduce demand and add to the shell of uncertainty that increasingly surrounds global supply chains. The hostilities in the Gulf region, including the closure of the Strait of Hormuz, are already creating acute shortages and driving up energy prices significantly.

As one of the world's largest industries, the apparel sector has a little ability to influence the outcome of these geopolitical developments. As in previous crises, our role as an industry federation is to articulate how the industry should respond and adapt in order to maintain stability and resilience.

We believe that the best way to deal with external shocks is to build the strongest possible foundations for our industry, to improve productivity and to reduce unnecessary waste of capital, material and human resources. Achieving this requires sustained investments in supply chain processes and deeper collaboration, supported by a framework of responsible purchasing practises.

Experience from previous crises shows that, when faced with external shocks, the first reflex for many buyers is to push costs and risks upstream into the supply chain. Yet, the ability of manufacturers to absorb rising costs is not limitless. While transferring all risks and costs upstream may generate short term benefits for buyers, depriving manufacturers of the capacity to invest, or even to meet existing operational costs, will weaken the industry and create long term loss for all.

Through our Sustainable Terms of Trade Initiative (STTI), the IAF actively works to build the infrastructure needed for manufacturers and buyers to operate within a more balanced and resilient system that delivers stronger outcomes for all.

Set, as it is, in the world's biggest oil and gas producing region, this particular crisis starkly illustrates the industry's continued dependence on fossil fuels. The days that a shift to an energy mix with more renewable energy sources was viewed only as environmental concern are now behind us. Investments in renewable energy are a shared strategic priority for apparel brands, retailers, apparel and textile manufacturers and governments alike.

Apparel and textile manufacturing countries play a leading role here, as do federations and associations. Through the Apparel and Textile Transformation Initiative (ATTI), launched in 2025, IAF and ITMF have joined forces to bring together these groups to determine the most effective pathways to drive strategic transformation of the industry with respect to energy, water and wider environmental impacts. With its clear and vital emphasis on energy security for the industry, the IAF will be sharing updates from ATTI pilot chapters in Bangladesh and Türkiye in the coming months.

In times of global uncertainty, strengthening the resilience, fairness and sustainability of apparel supply chains is an economic necessity.