Textile Exports Rebound: India Sets $350B Target as Apparel Hubs Diversify

26 Oct 2026, 10:43 by Vinay Kakkad · KalingaTV

New Delhi: Bolstered by an export turnaround and targeted infrastructure spending, India’s textile and apparel sector has set an ambitious valuation target of USD 350 billion by 2030, climbing from approximately USD 190 billion recorded in FY26.

The growth trajectory is detailed in a newly released assessment by Rubix Data Sciences, which highlights the industry’s role as a primary domestic employment engine alongside mounting capital investment.

Export Turnaround and Trade Balance

Between April and August 2026, outbound shipments of textiles, including handicrafts, expanded 10.3 per cent year-on-year.

The recent momentum marks a distinct shift from FY2026, when outbound shipments contracted 2.7 per cent to USD 35.8 billion. Concurrently, inbound shipments climbed 17.1 per cent to reach USD 9.6 billion.

Despite rising import volumes, India retained a substantial trade surplus in the segment, with overall exports valuing roughly 3.7 times total imports. Readymade garments formed the bulk of these foreign deliveries at 44 per cent, followed by man-made fibre textiles at 15 per cent.

Geopolitical Friction and Geographic Realignment

A primary catalyst reshaping the industry’s trade footprint has been escalating tariff friction with its largest single-country buyer.

The United States absorbed 31 per cent of Indian textile exports in FY2026, ahead of the European Union at nearly 16 per cent. However, trade dynamics faced disruption after Washington enforced an additional 10 per cent tariff in July 2026 under Section 301 provisions tied to forced-labour compliance, occurring alongside stalled bilateral discussions.

As a result, deliveries to American buyers dropped by approximately 7 per cent during FY2026. Conversely, exports to primary European destinations grew 9 per cent, prompting Indian apparel conglomerates to actively limit reliance on the US market:

Kitex Garments intends to slash its US exposure from nearly 100 per cent down to a band of 30 to 35 per cent within the coming two to three years.
Raymond Lifestyle has mapped a transition to lower its American export footprint from 65 per cent to between 55 and 60 per cent across a two-year timeframe.

Rubix Data Sciences President Tushar Bhaskar observed that while the sector demonstrated clear resilience by rebounding 10.3 per cent in early fiscal 2026 following the dollar-denominated contraction in FY2026, it faces compounding operational strain. Bhaskar pointed out that lingering trade ambiguity in America, freight bottlenecks, and an approximate 60 per cent surge in cotton yarn costs collectively mandate broader geographic diversification and sharpened cost efficiency.

Raw Material Volatility and Policy Intervention

On the domestic processing front, escalating raw material expenses have squeezed mill operators.

Cotton yarn climbed from Rs 250 per kilogram at the start of 2026 to around Rs 400 per kilogram by September 2026. This price inflation stems largely from tighter domestic agricultural yields, with local cotton harvests receding to 290.91 lakh bales during the 2025–26 crop year, down from 352.48 lakh bales logged in 2020-21.

To ease operational liquidity for spinning units, Indian authorities implemented an import tariff waiver on the standard 11 per cent cotton duty, effective through October 31, 2026.

Manufacturing Incentives and Capital Infusion

Government policymakers are preparing a substantial capital infusion to underpin the 2030 target. The central administration is actively evaluating the Textile Expansion and Employment (TEEM) Scheme, an envisioned five-year, Rs 400 billion package focused on modernising legacy manufacturing belts, subsidising equipment upgrades, and integrating advanced industrial automation.

At the same time, factory capacity is expanding across designated manufacturing hubs. By August 2026, cumulative investment commitments across the seven sanctioned PM Mega Integrated Textile Region and Apparel Parks reached Rs 685.9 billion, supported by significant manufacturing outlays from major domestic corporations such as Vardhman Textiles and Grasim Industries.

(Source: ANI)