Water Scarcity and Climate Adaptation in Key Manufacturing Regions

Introduction

Water scarcity has become an increasing global challenge due to the impacts of climate change. Climate change has led to pressure on freshwater sources and intensified droughts in many regions. Water scarcity is a “multidimensional crisis” and further affects not only environmental systems, but economic systems as well (Rahmati & Naghibi, 2025). This issue is especially large in many major manufacturing regions. This is because they are facing increasing risks from their resource availability that originate from water in water-intensive production systems. This has led to other risks like supply chain disruptions and long-term resilience. As the stress for climate adaptation and water scarcity issues continues to rise, strategies for adapting to these issues are becoming critical not only for sustainability but also for broader problems like environmental and resource management efforts.

Background and Context

In order to understand the background of water scarcity, it requires examining how factors such as climate change, industrial expansion, and the increasing demand for limited freshwater resources have contributed to this emerging crisis. In recent years, there has been a growing demand for water to support existing infrastructure, which has heightened researchers’ concerns about long-term water availability. This issue is a direct threat to textile supply chains, with water being an essential component throughout textile production processes, ranging from processes such as cotton cultivation to dyeing and finishing.

There are several factors that contribute to this issue; these can be categorized into two causes: human and natural. Natural causes consist of droughts, changes in rainfall patterns, floods, and uneven distribution of surface and groundwater. Human causes include pollution, poor management, population size, and urbanization. When these two causes occur simultaneously, there is a significant increase in pressure on water supplies that are already scarce; this issue is especially pronounced in regions known as major hubs for textile production, including countries such as China, Bangladesh, and India. Researchers have also noted that these issues affect all areas of the supply chain; a disruption at the local level can trigger a cascade of events that result in a decline in output and productivity across interconnected supply chains (Li et al., 2025). These disruptions can lead to a rise in operational costs, regulatory risks, and the destabilization of other sectors, which can ultimately lead to system-wide collapses.

Trend Analysis

Recent developments in the textile industry show a pattern of increasing pressure on global water resources. Textile manufacturing requires large amounts of water at every stage. Freshwater supplies are steadily diminishing in major manufacturing areas like northern Mexico and parts of India. Over the last ten years, textile producers have started to implement more industrial water reuse systems, showing an effort to adapt to the climate crisis. “There is a significant amount of water that will be consumed in the textile industry, which can strain local water sources, especially in regions that are already facing water scarcity issues” (Mikucioniene et al., 2024, p.1). Water availability is decreasing while demand is increasing due to population growth, industrial expansion, and climate change. As more water is required for agriculture, manufacturing, and other uses, there is a growing imbalance between supply and demand. The competition for water is affecting industries, local communities, and ecosystems.

There is a growing shift toward sustainable and adaptive technologies such as water recycling, low-water dyeing, and wastewater treatment systems. Industries are beginning to adopt water recycling systems, which allow wastewater from processes such as dyeing and finishing to be treated and reused, thereby reducing freshwater consumption. However, low water dyeing technologies are being introduced to minimize water use in one of the most intensive stages of production. Emerging technologies such as improved recycling systems, advanced filtration, and low water dyeing processes are designed to reduce both water consumption and pollution levels (Mikucioniene et al., 2024, p.6). The implementation of wastewater treatment systems has become very important; these systems remove detrimental pollutants such as dyes and heavy metals before water is discharged or reused. Effective wastewater management and treatment are essential for reducing environmental impact and enabling water reuse within the industry (Mikucioniene et al., 2024, p.4).

As water scarcity continues to increase it directly influences the sourcing and production decisions within the textile industry. Regions that face less limited freshwater availability are becoming less reliable for large-scale manufacturing, even if they offer lower labor costs. This causes companies to rethink where they produce goods, shifting to areas with more stable water access even if it results in higher operational costs. Supplier selection is being influenced by water management, as companies are arranging collaborators that implement water recycling systems, low-water dyeing technologies, and effective wastewater treatment. They help reduce long-term environmental risks and ensure sustainable production. As a result, water availability and management are becoming factors in sourcing decisions, shaping where production takes place, the cost trade-offs companies are willing to make, and the types of suppliers they choose to work with.

Implications for Sourcing Professionals

The apparel industry is one of the most water-intensive industries, using huge volumes to grow raw materials, dye and finish fabrics. Worldwide, roughly 2.2 billion people do not have access to water that is suitable to drink (Adegeest, 2026). Production hubs such as Pakistan, India, Bangladesh, and China are forecasted to reach intense water stress by the year 2050, along with heavy levels of pollution (Jehia, 2026). This pollution affects not only the environment but also the surrounding community. In addition to being unsafe for consumption, long-term public health crises have been linked to drinking water in apparel-producing communities in Bangladesh. Water scarcity creates a huge domino effect, increasing costs, delaying production, and destabilizing the industry and threatening reputations. Many companies comply with standards just to meet audits, not caring about anything until it is time for the next inspection. The environmentally responsible approach is one that is not often taken, with systems either not being installed in the first place, or turned off after the audit is completed in order to save money.

While water consumption cannot be entirely eliminated in textile production, it can be reduced, and manufacturers should strive for processes that use less water.  “In order to reduce the water footprint of the textile and apparel industry,…. There is a need to enhance water efficiency by promoting water reuse and wastewater treatment, and improve manufacturing technology and the use of environmentally-friendly dyes.”(Yang et al., 2020). There are already solutions in place to mitigate the impacts the apparel industry has on water usage, such as desalination, wastewater reuse, maintenance and further development of infrastructure, integrated water resources management (IWRM), and transboundary water cooperation. Even though these systems already provide some solutions, they still face challenges with their effectiveness in their current state. Along with the measures that are already in place, the industry is beginning to see new innovations when it comes to navigating this potential water crisis. With the emergence of artificial intelligence (AI) researchers have suggested the use of these advanced technologies to analyze and predict areas of water resource conservation, monitoring, distribution, and use (Rahmati et al., 2026). The use of AI can significantly reduce time and costs while still processing and analyzing large amounts of information on water use across the supply chain, enabling the industry to adjust certain practices and processes. Overall, the industry is headed in the right direction by using these solutions and should continue to align their goals in a sustainable way for the future.

“From a business perspective, the implications should be clear. Water stress disrupts production, raises costs, destabilizes sourcing regions and increases regulatory and reputational risk.” (Jehia, 2026). For sourcing professionals, this means production decisions must shift toward a proactive and strategic approach. Costs can no longer be based solely on the labor and materials used to produce garments; they must also take water-related expenses into account, including wastewater treatment, infrastructure investments, and the financial impact of potential disruptions. Speed may also be affected, as water shortages and stricter regulations can lead to delays in lead times, which will push sourcing professionals to adopt strategies such as supplier diversification, multisourcing, or nearshoring to mitigate risk and maintain flexibility. Evaluation of risk will become an even more significant deciding factor when making sourcing decisions, requiring professionals to assess water stress levels in sourcing regions and prioritize manufacturers with water management practices in place that can be verified; otherwise, they risk operational disruptions and reputational damages, which can lead to lost revenue. At the same time, sustainable water initiatives must move from being a secondary consideration to a structural requirement by setting measurable expectations (Adegeest, 2026). For sourcing professionals, this means working alongside suppliers who demonstrate continuous improvement and have sustainable focuses in place; this could include reduced water usage, recycling systems, and the use of environmentally friendly dyes. Ultimately, sourcing decisions will need to find the balance between cost, speed, risk, and sustainability, in order to prioritize long-term resilience, transparency, and ethical responsibility over short-term savings.

Conclusion

Water scarcity is becoming a serious issue in global manufacturing, especially in the textile and apparel industry. Since production depends heavily on water for processes like dyeing and finishing, shortages can create problems throughout the supply chain and increase costs for companies. This also connects to global trade, since water shortages in one region can affect sourcing decisions in others. Because of this, companies need to start paying more attention to sustainable practices, invest in better technology, and think carefully about where they choose to produce their products. Overall, water scarcity will continue to impact the industry, and companies that adapt will be in a better position in the future.

References

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