India’s textile and apparel industry crossed USD 194 billion in 2025-26, with domestic consumption accounting for 80% of that base and growing at 7% YoY. The sector employs millions across the value chain, contributes approximately 2% of GDP, and holds the fifth-largest global T&A export position with a 4% share. Yet the headline figures sit alongside a more contested structural reality: exports have grown at just 1% CAGR since 2019-20, the Ministry of Textiles’ USD 100 billion export target by 2030-31 requires a 17% CAGR from current levels, and US tariff disruptions in the second half of 2025 reversed what had been a positive momentum year.
What Shifted in 2025
The year opened with healthy export growth before August tariffs recalibrated the competitive order. China’s share of US apparel imports fell from 21% to 14% between January and October 2025. Vietnam emerged as the largest supplier to the US market. India held its position but did not expand share meaningfully. For Indian exporters, the distinction between a relative tariff advantage and an actual order conversion proved harder to close than anticipated.
On the domestic policy side, the picture was more constructive:
- MoUs exceeding Rs 27,400 crore were signed across the sector
- Seven PM MITRA mega textile parks moved into active implementation
- GST rationalization across garments, MMF, yarns, and handicrafts reduced cost pressure
- Rs 1,480 crore was allocated under the National Technical Textiles Mission
- Export incentives under RoDTEP and RoSCTL were extended
The Production Divergence Worth Noting
Within India’s fibre and yarn production base, manmade filament yarn output grew at 23% CAGR from 2019-20 to 2024-25, now representing 33% of total production at 4.8 billion kg. Natural fibre output, dominated by cotton at 38% share, declined at 3% CAGR over the same period. The divergence signals a structural shift in India’s manufacturing mix toward MMF and technical textiles, even as export conversion in these categories lags production growth.
What 2026 Is Setting Up
Progress on the India-UK FTA ratification and India-EU FTA signing is expected to expand export market access. Domestic consumption in Tier-2 and Tier-3 cities is positioned to provide more stable demand for manufacturers navigating export volatility. The PLI scheme extension through March 2026 continues to back investments in MMF apparel and technical textiles.
The unresolved tension heading into 2026 is whether India’s compliance capability, supply chain agility, and FTA-backed market access can together convert a structural sourcing window into durable export growth, before the window narrows again.
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The full report includes detailed market sizing across domestic and export segments, production and trade statistics by fibre, yarn, fabric, and garment category, state-level export breakdowns across 15 states, financial performance data for 46 publicly listed Indian T&A companies through H1 FY26, and a strategic outlook for 2026 covering global demand, compliance thresholds, and FTA-led market access.
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