India’s Textile Sector Poised For Global Comeback: Emkay

India’s textile and apparel industry is entering a pivotal growth phase, with policy support, favourable trade agreements and a strengthening domestic manufacturing ecosystem positioning the country to reclaim a larger share of global markets, according to a recent report by Emkay Research.

The report notes that despite India’s longstanding status as a textile powerhouse, its share of global apparel trade has remained largely stagnant at 3-4 percent over the past 15 years. However, a combination of structural reforms and emerging opportunities is expected to drive a significant turnaround.

“India has traditionally been a textile powerhouse but lost market share in the global apparel trade. We believe the country is now at an inflection point to regain its lost glory,” the report stated.

Among the key growth drivers identified are government initiatives aimed at strengthening the domestic man-made fibre (MMF) ecosystem, including the Production Linked Incentive (PLI) scheme, PM MITRA textile parks and ongoing petrochemical capacity expansions. These measures are expected to enhance the competitiveness of India’s textile value chain.

The report also highlights the strategic importance of Free Trade Agreements (FTAs) with major markets such as the European Union, the United Kingdom, Australia and other economies. Reduced or eliminated import duties under these agreements could significantly improve the position of Indian exporters against key competitors, including Bangladesh and Vietnam.

In the United States, Indian textile exporters are expected to benefit from a tariff advantage of approximately 7–8 percent over Chinese suppliers. Additional support from GST rationalisation, favourable import duty structures and stronger corporate balance sheets is further expected to bolster export competitiveness.

Emkay Research noted that Indian textile and apparel manufacturers have demonstrated resilience through a series of global disruptions, including the COVID-19 pandemic, the Russia-Ukraine conflict and heightened trade tensions.

“Supported by a robust domestic market, a favourable USD-INR exchange rate and strong balance sheets, domestic players are well-positioned to absorb future shocks,” the report observed.

The domestic apparel market is also emerging as a major growth engine, providing manufacturers with a stable demand base while reducing dependence on exports alone.

The report further identified technical textiles as one of the most promising segments for future expansion. Driven by rising demand from sectors such as packaging, defence, automotive and industrial applications, the domestic technical textiles market is expected to accelerate from a 7-8 percent CAGR during FY20–FY26 to early double-digit growth over the next five years.

According to Emkay Research, the combination of FTAs, tariff advantages, policy support, PM MITRA parks, PLI incentives and lower GST rates on MMF fibres and yarns could help India strengthen its position as a preferred global sourcing destination and restore its competitiveness in the international textile and apparel trade.