Fashion
Southeast Asia emerges as a key link in global AI supply chain
Indonesia’s export mix is increasingly aligned with the requirements of an AI-driven digital economy, positioning it as more than just a raw material supplier, JP Morgan said in its 2026 Asia Outlook report.
Southeast Asian economies are aligning with the global artificial intelligence investment cycle, moving beyond commodities and low-value manufacturing, according to JP Morgan.
Indonesia is evolving into an AI-linked exporter, while Vietnam has emerged as a connector economy amid supply-chain shifts.
Pro-growth policies are supporting domestic demand.
Geopolitical fragmentation and supply-chain reconfiguration have further reshaped regional dynamics. Vietnam has emerged as a ‘connector economy’, facilitating trade flows between the US and China as companies diversify production away from China. Competitive manufacturing costs, rising industrial capacity and increasing foreign direct investment have reinforced Vietnam’s role as a regional manufacturing hub.
Meanwhile, inflation across Southeast Asia remains relatively subdued compared with developed markets, supported by stable energy prices. This has allowed several central banks to adopt a more accommodative, pro-growth stance. In Indonesia, the new administration has announced fiscal measures to boost liquidity, accelerate public spending and support other sectors.
Together, easing inflation pressures and supportive policy settings are underpinning domestic demand and anchoring near-term growth prospects, strengthening Southeast Asia’s position within an increasingly AI-centric global economy.
Fibre2Fashion News Desk (SG)
While trends in high frequency indicators for January-February 2026 appear favourable, the heightened uncertainty around the duration of the Middle East conflict casts a shadow on the near-term macroeconomic outlook for India amid high import dependency for items like crude oil, natural gas and fertilisers, it noted.
India’s FY27 GDP growth is likely to slow to 6.5 per cent from the projected 7.5 per cent in FY26 owing to the impact of higher energy prices and concerns around energy availability, ICRA Ratings said.
The heightened uncertainty around the duration of the Iran war casts a shadow on the near-term macroeconomic outlook for India.
If the conflict lasts longer, the adverse effects could widen across sectors.
If the conflict lasts for an extended period, the adverse implications of the same could widen across sectors, amid an uptick in input costs and the consequent impact on profitability of the India corporate sector.
Amid the projected uptrend in the consumer price index-based inflation in FY27 with risks tilted to the upside, ICRA Ratings expects an extended pause on the policy rates by the central bank’s monetary policy committee in the fiscal despite the anticipated softening in the GDP growth. However, it expects the Reserve Bank of India to continue to intervene on the liquidity front during FY27.
The available data for January–February FY2026 indicate a positive trend across most non-agricultural indicators, with the year-on-year performance of 12 out of 18 indicators improving compared to the third quarter of FY26, while the remaining six deteriorated.
Fibre2Fashion News Desk (DS)
Indonesia’s apparel exports rose modestly to $8.705 billion in 2025 from $8.316 billion in 2024, reflecting gradual recovery.
The US remained dominant, accounting for over 56 per cent of shipments, highlighting growing market dependence.
While Japan, South Korea and Europe offered stability, exports stayed concentrated in key products and segments.
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Methanol prices in India have surged nearly 150 per cent from pre-Iran–US tension levels, tracking a sharp rise in crude oil and tightening global energy markets.
Hormuz disruption risks, limited rerouting capacity, rising freight and insurance costs, and constrained imports are fuelling volatility, with prices seen approaching ₹90 per kg.
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