Redirecting Indian Textiles

Akhil Jain suggests that the opportunity in 2026 lies in merging this legacy with the future to emerge as a global leader in technological innovation, measurable sustainability, and responsible manufacturing.

The Indian textile industry stands today at a pivotal juncture. We are not merely recovering from global headwinds; we are on the cusp of a profound, structural transformation. For an industry that is the second largest employer in the country after agriculture, and one that is so intrinsically linked to our cultural and economic fabric, the year 2026 is less a date on the calendar and more a moment for reinvention. It is a moment to shed old inefficiencies, embrace high-value innovation, and cement India’s position as a robust, resilient, and relevant global textile power.

Key shifts shaping the market

The next few years will be defined by the confluence of three powerful, non-negotiable forces: Technology, policy, and evolving global demand.

The technology mandate: Data-driven evolution

The future of textiles will not be woven on a shuttle loom alone; it will be coded. Technology is moving far beyond mere automation on the factory floor.

Digital product development:The adoption of 3D design and virtual sampling is a game-changer. It dramatically reduces time-to-market, cuts down on physical sample waste, and allows rapid design iteration. This shift is critical for agility, particularly in fast-fashion cycles as well as precision-driven technical textile segments where speed and accuracy determine competitiveness.

AI and data analytics:Machine learning algorithms are increasingly optimising raw material procurement forecasts, identifying defects in real time on production lines, and enabling sharper demand prediction. This transition from reactive manufacturing to proactive, demand-led production is essential to building leaner, more resilient supply chains.

Technology in technical textiles:Advanced manufacturing technologies such as automated coating lines, nanofibre production, and smart textile integration are enabling India to move from basic technical fabrics to performance-driven applications. These include fire-retardant materials, antimicrobial medical textiles, and high-strength geotextiles, where precision and consistency are non-negotiable.

Policy as an accelerator

The government’s strategic interventions are providing the necessary structural bedrock for growth.

PLI (Production Linked Incentive) scheme:The PLI scheme is critical because it incentivises scale in high-value segments, particularly Man-Made Fibre (MMF) apparel, MMF fabrics, and technical textiles. By encouraging investment beyond cotton-heavy portfolios, it is helping correct structural imbalances and enabling India to compete with synthetic-dominant global exporters.

PM MITRA parks:The PM Mega Integrated Textile Regions and Apparel (PM MITRA) Parks, built on the ‘5F’ vision from Farm to Foreign, aim to create world-class textile ecosystems. Co-locating spinning, weaving, processing, and garmenting is expected to significantly reduce logistics costs and lead times, historically two of India’s weakest points in export competitiveness.

State-level incentives:Several state governments are complementing central schemes with subsidies for capital investment, employment generation, power tariffs, and logistics facilitation. This decentralised policy push is accelerating cluster-level growth and improving ease of doing business.

Global supply chain re-alignment

The global sourcing landscape is undergoing a fundamental re-alignment driven by geopolitical risk, rising costs, and the need for supply chain resilience. Buyers are actively pursuing a “China Plus One” strategy. India, with its end-to-end value chain from fibre to finished goods, is naturally positioned to benefit.

However, capturing this opportunity decisively will depend on manufacturing efficiency and logistics readiness.

India’s apparel manufacturing productivity still lags behind key competitors, with efficiency levels estimated to be 15–20 per cent lower than countries such as Vietnam and Bangladesh. Bridging this gap requires investment in automation, shop-floor digitisation, and standardised production systems.

Logistics costs in India account for nearly 13–14 per cent of GDP, compared to 8–9 per cent in developed economies. Improving port efficiency, multimodal transport integration, and last-mile connectivity will be as critical as factory-level improvements in securing long-term export growth.

Emerging high-value segments

To achieve global leadership, India must move beyond commoditised apparel and commit to high-value, knowledge-driven segments.

Technical and functional textiles:This is arguably India’s most significant growth opportunity. Applications across infrastructure (geotextiles), healthcare (medical textiles), agriculture (agrotextiles), and defence (protective textiles) are expanding rapidly. These segments are driven by performance standards rather than price sensitivity. While the National Technical Textiles Mission has laid the foundation, sustained industry-led R&D investment will determine India’s share in this high-growth global market.

Sustainable, circular, and eco-friendly textiles:Sustainability is no longer a marketing narrative; it is a regulatory and commercial requirement, particularly in the EU and other developed markets. While progress has been made in reducing water and energy usage, the next phase demands deeper material innovation and circularity. Focus areas include:

• Waterless or low-water processing technologies
• Scaled adoption of certified sustainable fibres such as Tencel, organic cotton, and recycled polyester
• Developing viable recycling solutions for post-consumer textile waste, especially blended fabrics
• Transparent sourcing and traceable supply chains to counter greenwashing and build buyer trust

Premium and value-added apparel: India must leverage its strength in design sensibility and craftsmanship to move up the apparel value chain. This requires investment in advanced finishing, garment engineering, and flexible manufacturing systems capable of handling smaller, complex production runs without compromising efficiency.

Critical challenges

The R&D and material innovation gap:India’s investment in textile R&D, particularly in specialty fibres and next-generation materials, remains significantly lower than global peers. Developing bio-based materials, smart textiles, and advanced composites will require collaborative research models involving industry, academia, and government-supported innovation centres.

Skill development and workforce transformation: The shift toward smart factories is redefining workforce requirements. Skills in automated machinery operation, digital design tools, and data analytics are becoming essential. Existing skilling initiatives must evolve from basic training to precision-led, technology-aligned programmes across the value chain.

Compliance, traceability, and international standards: Global buyers increasingly demand transparency in environmental impact, chemical usage, and ethical sourcing. Technologies such as blockchain and digital product passports will become essential for end-to-end traceability. Additionally, the growing requirement for Scope 3 emissions reporting presents a significant capability gap for many Indian manufacturers.

Export competitiveness and FTAs:Despite competitive labour costs, logistics inefficiencies and tariff disadvantages often erode India’s export potential. Securing favourable Free Trade Agreements with key markets, particularly the European Union, remains critical to levelling the playing field.

New business models & innovation approaches

Vertical integration and ecosystem-led growth: Integrated value chains offer better control over quality, speed, and sustainability outcomes. The future belongs to enterprises that manage ecosystems rather than fragmented supplier networks.

Data-led decision-making: From predictive maintenance to real-time inventory optimisation, data-driven operations will be central to efficiency and capital discipline.

Collaborative innovation:The industry must adopt open innovation models through partnerships with technology startups, academic institutions, and shared infrastructure initiatives such as centralised effluent treatment plants to meet environmental norms collectively.

The CEO’s blueprint

• Innovation as a culture, not a department
• Sustainability with measurable impact, aligned with global benchmarks such as SBTi
• Talent and leadership development across technical and managerial roles
• Building global trust through consistency, compliance, and ethical practices

India’s textile industry has all the foundational elements: abundant raw materials, a vast domestic market, and a deep legacy of craftsmanship. The opportunity in 2026 lies in merging this legacy with the future to emerge as a global leader in technological innovation, measurable sustainability, and responsible manufacturing.

The road ahead demands strategic capital, collective action, and disciplined execution. If we rise to this moment, India will not merely compete, but lead the transformation of the global textile industry.

About the author:

Akhil Jain, MD of Jain Amar and CEO of Madame, is a third-generation entrepreneur spearheading one of India’s fastest-growing women’s fashion houses. A NIFT graduate, he blends creative vision with strategic foresight to transform an 8-decade old family business into a contemporary fashion powerhouse. Under his leadership, Madame has built a strong national footprint, embraced digital-first retail through madameonline.com, and continues to push boundaries in design, sustainability, and customer experience. His innovative approach consistently pushes boundaries, positioning Jain Amar at the forefront of India’s evolving fashion and textile industry.