The productivity crisis is no longer a theoretical risk; it is a mechanical and biological reality crippling India’s industrial heartlands
India is currently winning the global trade shuffle. As political instability rocks traditional hubs such as Bangladesh, international buyers are pivoting toward Indian textile clusters. But as factories in Tiruppur and Bengaluru take on these surge orders, they are walking into a thermodynamic crisis they haven’t budgeted for.
The crisis is personal before it is industrial. A textile worker in Tamil Nadu loses 50% of her work capacity on a 40°C afternoon; and as she does not have any sick leaves or cooling breaks, she also loses 50% of her day’s wages. She absorbs the cost of a warming planet so that global supply chains remain ‘efficient.’ However, the biology of labour is hitting a wall, and India’s textile industry is quietly cracking under the weight.
The crisis of productivity
Between 2001 and 2020, India lost an estimated 259 billion labour hours annually due to heat stress, a productivity haemorrhage exceeding $600 billion each year. In 2024 alone, that loss spiked to as high as 247 billion hours.
The productivity crisis is no longer a theoretical risk; it is a mechanical and biological reality crippling India’s industrial heartlands. In the manufacturing hubs of Palghar, Maharashtra, factory owners report production capacity dropping by up to 50% as extreme heat triggers hazardous conditions that jeopardise both man and machine. Intense temperatures often restrict operations to just four hours daily, as heat becomes unbearable for the workforce. It also increases the likelihood of workplace injuries and serious health conditions, including heatstroke and dehydration. Industrial equipment, designed for more temperate baselines, frequently overheat, leading to sudden operational shutdowns and technical failures that derail tight production schedules. This physical collapse of the shop floor is mirrored in Karnataka’s textile factories, where, indoor temperatures routinely exceed 35-40°C, far above the permitted threshold of 30°C. At these extremes, the “human engine” throttles down as a matter of survival. International studies confirm that at 33-34°C, a worker’s capacity is effectively halved.
As per research published in the Journal of Political Economy in 2021, annual output falls by 2% per degree Celsius. On individual hot days, the decline reaches 4%. For India’s textile industry, which employs 45 million people and controls 39% of global cotton cultivation, this crisis has led to operational collapse.
The supply chain trap
Global brands impose strict delivery deadlines and heavy financial penalties for delays. Yet, workers cannot be pushed beyond physiological limits. Thus, factory managers face an impossible choice: ignore worker collapse to meet a shipment, or face financial ruin. As orders shift to India due to regional and political instability, hubs such as Tiruppur are being crushed by a “thermodynamic bottleneck” where surge orders collide with record-breaking heat. This creates a regressive tax on the poor, disguised as a weather problem. While global brands insulate themselves by diversifying sourcing — shifting orders to Vietnam or Mexico — local factory owners lack the bargaining power to renegotiate terms and the burden is pushed downward. Ultimately, the cost is absorbed by the millions of informal workers who have no safety net; when a factory floor becomes a furnace, they don’t just lose productivity, they lose their daily wages. History has shown that when disruption strikes, workers pay the price; for example, during COVID-19, brands cancelled $2.8 billion worth of orders from Bangladesh in March 2020 alone, affecting approximately 1.2 million workers.
By 2030, India is projected to lose 5.8% of its daily working hours to extreme heat, the equivalent of 34 million full-time jobs. The supply chain will not break gradually; it will break when orders simply cannot be met because the human element has reached its thermal limit.
The way forward
India has a choice. It can either continue to externalise the cost of a warming planet onto workers, or the country can systematically transit to a climate-smart supply chain. This requires action on five fronts: first, policymakers must recognise heat stress as a supply chain risk and integrate climate-heat projections into industrial policy and trade agreements. Second, industrial clusters must adopt mandatory heat-action plans with enforceable temperature thresholds, cooling breaks, and worker health assessments. Third, financing mechanisms must be reformed. Banks must incorporate climate risk into loan assessments, and governments must offer concessional credit lines supporting investments in cooling systems, water management, and heat-resilient technologies. Fourth, labour protection codes must be strengthened to address heat stress explicitly. Workers must have guaranteed access to clean drinking water, and shaded rest areas. Fifth, innovation must be driven through targeted R&D grants for wearable cooling technologies, heat-tolerant cotton varieties, and energy-efficient manufacturing processes. And finally, international buyers must bear part of the adaptation cost, through fairer pricing and longer lead times. For decades, the global fashion industry has operated on a convenient lie: that the ‘cost of production’ is a static number on a spreadsheet. This number was artificially deflated by a climate we took for granted. The physics of thermoregulation will not bend to profit margins. If heat stress remains invisible in boardrooms, India’s workers will pay in lost wages and shortened lives.
Sreoshi Banerjee is a postdoctoral researcher at the Potsdam Institute for Climate Impact Research (PIK); Raktimava Bose is consultant at the National Council of Applied Economic Research (NCAER). Views expressed are personal.
