India, which contributes USD 35 billion annually to textile exports, has set its sights on an ambitious goal of USD 100 billion by 2030 with the 5F vision of “Farm to Fibre to Factory to Fashion to Foreign”.
After a 7.87 per cent decline from USD 37.16 billion in 2018 to USD 34.24 billion in 2023, India’s textiles sector has emerged as a beacon of resilience growing 7 per cent to USD 21.35 billion during the April-October period with ready-made garment category leading the surge, according to the Commerce Ministry.
The combined imports of ready-made garments, cotton textiles, and handicrafts rose roughly by 11 per cent year-on-year in FY25.
The initial low was attributed to geopolitical crises around red sea, which affected export movement during January, February and March 2024.
India is now the 6th largest exporter of textiles and apparel in the world, with a global trade share of 3.9 per cent. The share of textiles and apparel in the overall export basket of India is a significant 8.21 per cent, underlining the country’s crucial role in the global textile supply chain spanning cotton production to finished goods like ready-made garments and home furnishings.
The industry is also one of the largest employers, providing employment to over 45 million people directly, with an additional 100 million jobs in related sectors. Cotton cultivation alone supports an estimated 6 million farmers and 40-50 million people involved in processing and trade.
An Opportunity Emerged
To achieve the USD 100 billion target by 2030, India has to enhance its competitiveness against dominant players like China and Bangladesh, while making use of its strategic positioning in the global textile landscape.
The decline in its share in world textile and apparel exports began in 2015 and reached its lowest at USD 44 billion in 2022, except during the COVID pandemic.
Despite a population of 1.4 billion, providing both a massive workforce and a huge domestic market, Vietnam and Bangladesh outpaced India with 81.6 per cent and 69.6 per cent growth in garment exports respectively between 2013 and 2023, against India’s paltry 4.6 per cent, according to the last Global Trade Research Initiative (GTRI) report.
China, the EU, Bangladesh and Vietnam, the last two having gained ground due to factors like lower costs and better technology, have dominated the global garments trade. India’s garment exports stood at a mere USD 14.5 billion in 2023-24 as against USD 15 billion in 2013-14, having failed to keep pace with China (USD 114 billion), the EU (USD 94.4 billion), Vietnam (USD 81.6 billion), and even Bangladesh which grew nearly 70 per cent to hit USD 43.8 billion.
A research report blamed barriers on raw material imports and difficult customs and trade procedures for India losing ground to rivals like Vietnam and Bangladesh as a low-cost manufacturing export hub in over a decade.
The textile export saw an upswing of USD 23.30 billion in the last eight months of the current fiscal year from USD 17.05 billion in April-November 2020 (FY21) with revival in key UK and US markets and new buyers like Japan and the Netherlands, showing interest in Indian products.
The share of the USA and the EU in total textile and apparel exports is around 47 per cent.
According to the CRISIL report, the market size of the cotton yarn and ready-made garment industry is estimated to have crossed INR 6,000 billion in FY 2024. India is the largest exporter worldwide, contributing 23 per cent to the global output of cotton production. It is the third-largest exporter of polyester yarn.
This exhibits resilient India’s ability to adapt and thrive despite the global economic uncertainties and shifting trade dynamics. It is now stepping towards reclaiming its historical prominence amid the recent political unrest in Bangladesh, the US-China tariff dispute and a lingering Russia-Ukraine war, which has forced the global apparel sector to scout for shifts in the supply chain.
In order to revitalise the textile sector, INR 4,417.03 crore was allocated for the 2024-25 fiscal year, a 28 per cent increase from the previous year.
High tariffs in key markets, reliance on cotton textiles, and competition from low-cost producers, however, are some of the challenges that continue to stare India in the face. To bridge these gaps, the growth plan needs to be built on government initiatives, improved infrastructure, and expansion into technical textiles along with a robust FDI. Improving labour conditions and modernising MSMEs will help sustain the growth story with projections of textile exports reaching USD 65 billion by FY26 and USD 350 billion by 2030 at a compound annual growth rate (CAGR) of 10 per cent.
The Push & Expansion
Ideally placed to again grab the mantle of a major global supplier, India has to push forward in both production and sustainability by combining traditional strengths with modern technologies.
A number of schemes and policy initiatives are part of the roadmap to leverage and catalyse India’s inherent strengths like end-to-end value chain capability, a strong raw material base, a large export footprint and a vibrant and rapidly expanding domestic market. These are aimed at modernising infrastructure and encouraging investments in the textile sector.
Over INR 90,000 crore of investment is expected to flow through seven PM Mega Integrated Textile Region and Apparel (PM MITRA) Park inspired by the 5F vision for furthering the growth of textile sector in the economy while making the industry globally competitive and Production Linked Incentive (PLI) Scheme in the next 3-5 years, according to government sources.
Shifting focus beyond traditional apparel, India launched the National Technical Textiles Mission to acquire the leadership position in emerging sectors such as technical textiles, opening up new growth avenues in industries like automotive, healthcare, aerospace and agriculture.
The global trade of technical textiles is around USD 300 billion, while India’s domestic market size stands at USD 25 billion with an export of USD 2.6 billion.
In order to bridge this gap, the Mission promotes start-ups and research projects covering specialty fibres and composites, geotextiles, agro textiles, protective textiles, medical textiles, defence textiles, sports textiles, and environment friendly textiles.
The rapid advancements in material science are expected to help India position itself as a leader in the development of textiles that meet the needs of these highly specialised industries.
Additionally, trade pacts, particularly with Australia, with reduced trade barriers have bettered India’s position in their market, translating into real opportunities. Over 96 per cent of exports from India to Australia currently enjoy tariff-free status, with full coverage expected by January 2026.
India also sees a significant opportunity with the US planning to impose higher tariffs on China, particularly in sectors where the dragon country has been a dominant supplier. Accordingly, exporters have urged the Finance Ministry to approve a US-focused marketing scheme worth INR 750 crore in the Union Budget 2025-26 to generate additional exports of USD 25 billion to the US over the next three years.
Major retailers in the US are also diversifying their supply chains under the China+1 strategy.
Furthermore, India must quickly establish a favourable ecosystem by offering single-window clearances, incentives, and reducing bureaucratic complexities to convert some of the temporary advantages, including disruption in Bangladesh’s garment industry, into a lasting gain.
Textile hub of Tirupur is already experiencing a resurgence after nearly two years with a flurry of orders worth billions of dollars from influential buyers in Europe and the USA redirected to Indian. Besides foreign investors, approximately 25 per cent of the manufacturing units in Bangladesh are owned by Indian companies.
In addition, India is progressing rapidly towards implementing the FTA with four-nation European bloc EFTA before the end of this year. It will further catalyse the growth of the Indian textile industry, especially in terms of critical inputs, technology, and product development opportunities. The EFTA’s market access offers covers 100 per cent of non-agri products and tariff concession on processed agricultural products.
India has also been negotiating favourable trade agreements with countries like the UAE and potentially the UK and the EU, which will provide the sector with access to new markets and reduce tariffs on textile exports.
The textile sector also needs to expand into regions like Africa, Latin America, and Southeast Asia to tap into growing demand.
Weaving Gaps
To regain its textile glory, India also needs to boost production and export of synthetic apparel to meet global demand.
Reports suggest that 70 per cent of clothing bought by developed countries is made of mixed synthetics and the Indian apparel industry being weak on that front is missing out on a substantial market segment, currently dominated by China.
The share of synthetic fabrics in India’s apparel industry exports is less than 40 per cent and a modest 5-6 per cent in the global synthetic textile market, according to GTRI.
This apart, strengthening weaving and processing capabilities through integration of automation and digitisation, becoming fast fashion compliant, diversifying into newer products, negotiating non-tariff barriers for a competitive edge, liberalising labour laws, and Improving operational efficiency and supply chain complying with international standards, can help India find a place under the Sun once again.
