Middle East conflict may raise costs for Indian companies

Indian companies are closely watching the Middle East conflict, fearing higher costs for packaging and freight. Parle Products expects pressure on prices, while auto and FMCG firms are monitoring exports and market exposure amid regional instability

New Delhi: Biscuit maker Parle Products expects the conflict in the Middle East following US and Israeli airstrikes in Iran to lead to a rise in the cost of packaging material and freight.

Parle Products Vice President Mayank Shah told PTI that if there is an escalation of the conflict in the region, there would be an increase in costs and that might be a thorn for consumers.

---

“We are expecting the current situation to have an impact on two cost centres. One is packaging material, which is derived from crude, and the second is freight. The expectation is that it should not really prolong, and that is what we wish,” he said when asked about the impact of the conflict on Indian firms.

Other FMCG players such as Marico and Dabur did not comment.

On the other hand, carmaker Maruti Suzuki India said it is closely monitoring the situation and the likely impact on its exports to the region.

During a call on the monthly sales release, Maruti Suzuki India Senior Executive Officer Rahul Bharti said, “We are closely monitoring the situation. However, our exposure to the Middle East as an export region is not very high. This year, for example, it accounts for about 12.5 per cent of our total exports.”

In the April-February period this fiscal year, Maruti Suzuki India’s total exports were at 4,00,734 units as compared to 2,99,617 in the corresponding period of last year.

Bharti said the company exports to nearly 100 countries and has ensured that its portfolio is well diversified and inherently de-risked.

A Tata Motors Group spokesperson said, “We do not have any exports to the Middle East in passenger vehicles, and our commercial vehicle exports to the Middle East are not very significant.”