Exports Hit ₹3.16 Lakh Crore Amid Value Shift

India's textile exports grew 2.1% in fiscal year 2025-26, reaching ₹3.16 lakh crore from ₹3.09 lakh crore in the previous year. This modest growth highlights a strategic shift towards higher-value products, with ready-made garments remaining the top export category (up 2.9% to ₹1.39 lakh crore). Handicrafts, excluding handmade carpets, showed strong growth of 6.1% to ₹15,855 crore, signaling a move essential for long-term competitiveness.

Growth Drivers and Conflicting Data

Despite global shipping disruptions, other segments contributed to growth. Cotton yarn, fabrics, and made-ups rose 0.4% to ₹1.02 lakh crore, while man-made versions grew 3.6% to ₹42,687 crore. However, conflicting reports exist for the broader textile and apparel sector. While some data suggests around USD 37 billion for FY2024-25, other analyses indicate a -2.21% degrowth for April 2025-March 2026, reaching US$35.8 billion. This suggests volatility in overall export performance.

Policy Support and Market Expansion

Government policy provided crucial support with extensions for key incentive schemes like RBST&L and RDP beyond March 2026, offering stability. Exports grew across over 120 countries, with strong gains in emerging markets like Egypt and Nigeria, alongside established hubs like the UAE and Germany, indicating a diversified export strategy.

Trade Deals and Global Competition

New trade agreements with EFTA, the UK, Oman, New Zealand, and the European Union are expected to improve market access and lower tariffs, integrating India further into global supply chains. These deals aim to create new opportunities. Globally, the textile market is projected to grow, but competition is fierce. China saw 17.6% export growth in Jan-Feb 2026, while Vietnam targets US$50 billion exports for 2026. Bangladesh reached $38.8 billion in 2025. India's sector has a market capitalization of ₹3.0 lakh crore, with companies like Page Industries, K.P.R. Mill, and Vardhman Textiles being major players.

Key Challenges Ahead

The sector faces significant challenges. Geopolitical tensions and conflicts threaten global supply chains and shipping costs, affecting delivery times and profits. Intense competition from Vietnam and Bangladesh, due to their trade pacts and lower labor costs, remains a hurdle. Reliance on government incentives carries risk if policies change. Volatile cotton prices can hurt margins, and increased cotton fiber imports raise dependence concerns.

Outlook Remains Stable

The Indian textile sector's outlook remains stable, supported by policy and trade agreements. Continued focus on higher-value products and expanding into emerging markets will be key drivers for future growth. Successfully navigating trade talks and global supply chain shifts will be critical.