Amid the uncertainty, the Iran conflict gives a boost to India’s cotton yarn hub.

Supply chain and fuel disruptions caused by the war in the Middle East have hit many Indian factories hard, but cotton yarn producers like Fiotex Cotspin are ramping up production to meet an unprecedented surge in demand from Chinese clients.

India is the world’s second-largest cotton producer after China, which however relies on imports for roughly 15% of its raw cotton and about 20% of its yarn to meet demand.

With the war in the Middle East disrupting trade routes, cotton supplies to China from other countries have dropped, making India a preferred and nearby source, according to Indian traders. Coupled with tight domestic supply and shipment delays from the U.S. and Brazil, this has fueled a sharp increase in China’s imports of yarn.

Also, the ​rupee has weakened about 7% against the yuan this year, making Indian cotton yarn imports cheaper for Chinese buyers. Ripple Patel, managing director ​of spinning mill Fiotex in the western Indian state of Gujarat, said his export order book has grown by 40% in recent months, and his factory is at 100% capacity utilisation, compared to 90% earlier.

“As exports offer better profit margins, we’ve increased their share… Orders are already booked through June,” Patel told Reuters. China’s National Textile and Apparel Council chose not to comment on the growing imports from India.

Many manufacturing hubs in India have suffered due to shortages of commercial gas and an increase in the prices of inputs ‌like plastics ⁠and industrial spare parts.

But spinning mills have been spared fuel disruptions as they largely run on grid or solar electricity, industry executives said.

Around 1,500 containers – carrying 30,000 tonnes of cotton yarn – are sailing from India to China each month since November, compared to an average 300 containers earlier, said Rahul Shah, co-chair of Textiles Committee in Gujarat Chamber of Commerce and Industry.