India’s Textile Sector Eyes Growth As China+1 Shift Opens Export Opportunity

India’s textile and apparel industry could be entering a new phase of growth as global brands look to diversify sourcing beyond China, but the country will need to move beyond its traditional dependence on cotton to fully capture the opportunity, according to a Jefferies report.

The global textile and apparel trade is now worth more than US$ 900 billion, with apparel accounting for about 60% of the market. India, which exports around US$ 37 billion of textiles and apparel, has several advantages that could help it increase its share, including an integrated fibre-to-fashion value chain, raw material availability, manufacturing capabilities, skilled manpower and government support.

The biggest opportunity could come from the growing ‘China+1’ strategy, under which global brands and retailers are diversifying their supply chains to reduce dependence on a single sourcing market.

For India, this could mean more orders, new global customers and an opportunity to strengthen its position as an alternative manufacturing base. But Jefferies has highlighted a major structural mismatch: while global consumption is increasingly moving towards man-made fibre (MMF) apparel, sportswear, athleisure and technical textiles, India’s export basket remains heavily skewed towards cotton.

This could limit the country’s ability to benefit from the global sourcing shift unless manufacturers step up investments in MMF-based products, processing and garmenting.

Home textiles remain a stronghold
Home textiles could offer India one of the most immediate opportunities. The segment accounts for an estimated 7-10% of global textile trade and is benefiting from housing growth as well as rising consumer spending on home interiors and aesthetics.

India already has a strong presence in the US home textile market, where Indian companies command an estimated 45-60% share in key categories.

Europe, however, presents a very different picture. India’s share of the UK and European Union home textile markets is estimated at only 5-25%, indicating substantial headroom for growth.

Improved market access could provide an additional boost. The India-UK Free Trade Agreement, effective from July 2026, is expected to improve India’s tariff competitiveness in the UK, while a prospective India-EU FTA from 2027 could further open European markets to Indian exporters.

Together, the agreements could provide preferential access to a textile import market estimated at around US$ 220 billion, helping India address one of the disadvantages it has faced against competing sourcing destinations.

Apparel remains the bigger prize
The opportunity becomes significantly larger in apparel. The US, EU and UK together account for more than US$ 300 billion in apparel imports, making them crucial markets for countries seeking to expand garment exports.

Yet India’s share of apparel imports in the EU and UK remains relatively small despite its established textile ecosystem and strong cotton value chain.

The gap reflects several longstanding challenges, including limited FTA coverage, high logistics and compliance costs, relatively small garmenting capacities and a product mix dominated by cotton.

Bangladesh and Vietnam, meanwhile, have built strong positions in global apparel through export-oriented manufacturing ecosystems, competitive costs and favourable market access.

The competitive equation could change as Bangladesh gradually loses some of the trade advantages associated with its Least Developed Country (LDC) status. At the same time, continued supplier consolidation and the China+1 strategy could prompt global brands to diversify their sourcing networks further.

MMF is the missing piece
For India, the opportunity is not simply about replacing Chinese suppliers. The larger challenge is to build the capabilities required by the next generation of global textile consumption.

MMF apparel is likely to be central to this transition. Polyester and other man-made fibres have gained significant ground globally, particularly in sportswear, activewear, athleisure and performance clothing.

India already has a substantial fibre and textile manufacturing base, but it has yet to convert that strength into a proportionate share of global MMF apparel exports.

Technical textiles offer another major growth avenue. Demand for high-performance materials is rising across industries such as automotive, healthcare, construction, filtration and infrastructure, creating opportunities beyond conventional apparel and home textiles.

From cotton strength to a broader export basket
Jefferies’ assessment points to a broader challenge for India’s textile industry: converting its existing strengths into a more diversified and globally competitive export proposition.

India has many of the building blocks required for this transition — a large domestic market, access to multiple fibres, an integrated textile ecosystem, manufacturing expertise and a sizeable workforce.

What remains critical is investment in the areas where Indian exporters continue to lag global competitors, particularly MMF products, large-scale garmenting, technical textiles, logistics and compliance.

The China+1 shift could provide the catalyst. As global buyers reassess supplier networks and seek greater diversification, Indian manufacturers have an opportunity to secure larger and longer-term relationships with international brands.

But simply adding capacity may not be enough.

The next phase of India’s textile growth will depend on how quickly the industry can move beyond its traditional strengths in cotton and home textiles and build scale in MMF apparel, sportswear, athleisure, technical textiles and value-added garments.

With China+1 sourcing, supplier consolidation, improved trade access and changing advantages for Bangladesh reshaping the global sourcing landscape, India could have a significant window to increase its share of the US$ 900-billion-plus global textile and apparel market.

The opportunity is substantial. The challenge now is to convert India’s manufacturing strength into a more diverse, competitive and globally relevant textile export engine.