Apparel exports in 2026 will be won by logistics strategy, not luck

As exports to the United States contract sharply, exporters expanding their market share into 111 other nations proved that diversification is as much a power move as it is a step towards long-term success, says Jitendra Srivastava.

After the recent US tariffs hit the Indian markets, the government intervention was the saving grace for many Indian textile exporters in the last four to five months of 2025. However, with the waiver on cotton import duty nearing expiration (December 31st), a long-term strategy ought to replace the stop-gap measure, making textile exports in 2026 a calculated path to success, rather than a gamble.

At first glance, the central challenge appears to be the trade barrier to the USA, India’s largest market for cloth exporters, which attracted 35 per cent of India’s textile export shipments. As exports to the United States contract sharply, exporters expanding their market share into 111 other nations proved that diversification is as much a power move as it is a step towards long-term success.

Diversification protected Indian textile exports today

The revenue generated during April-September 2025 from these markets had offset the losses from the U.S.A. Compared to the first half of last year, the same period in 2025 witnessed a 10 per cent spike in the exports to the 111 non-US countries, clocking in an absolute $770.3 mn increase—according to a PIB release, published on the 12th November 2025. The press note was especially promising for the ready-made apparel segment, which expanded its exports to these 111 nations by 3.2  per cent.

Further, exports to 38 countries saw a 50 per cent uptick. In 16 other countries, the export growth rate ranged from 25 per cent to 50 per cent, while in the remaining 57 countries, the export spike had yet to reach 25 per cent.

Exporters performed well in the established, top markets for Indian textiles. The figures stated in the PIB release are “UAE (14.5 per cent), UK (1.5 per cent), Japan (19.0 per cent), Germany (2.9 per cent), Spain (9.0 per cent) and France (9.2 per cent).” They also made impressive headways in Egypt, Saudi Arabia, and Hong Kong, hitting a growth rate of 27 per cent, 12.5 per cent, and 69 per cent, respectively.

But what about the challenges these figures don’t address?

Where the problem begins

The ground reality is that profits from the new, viable markets are and will remain suboptimal. The challenge here is the lack of trade corridor expertise among most apparel exporters, not diversification. In fact, diversification and corridor expertise go hand-in-hand.

On one hand, trade reforms are the government’s prerogative, leaving no room for the businesses to manoeuvre the negotiations, and on the other hand, the textile exports market suffers from a gamut of problems rather than a lack of corridor knowledge.

Considering the market is tied to geopolitics, it is likely to undergo many more cycles of volatility. Hence, the only way forward is to create a future-proof playbook, which will be instrumental for achieving the ambitious target of taking the Indian textile exports market from today’s valuation of $37.7 bn to a whopping $100 bn by 2030.

A comprehensive assessment of the fault lines in the Indian textiles arena worldwide demands attention to a few focus areas: strategic import-export planning, working capital sophistication, raw material arbitrage, and command over dynamic cost optimisation in multi-modal, cross-border shipping.

Rethinking modal economics to counter volatility

While ocean freight is generally economical in terms of cost-per-unit, tariffs or any other risk to shipments may eat into the margins, even lead to losses. Unexpected scenarios can potentially upset even the returns on seasonal trades, which are usually considered reliable.

In such a case, air shipping, though it incurs a premium, can fetch greater profitability, should the batch arrive in time to leverage the high-demand and time-sensitive procurement cycles. Ocean routes, on the contrary, are meant for trades which offer greater room for slight delays.

Another key consideration must be inventory carrying cost, i.e., the opportunity cost due to the capital locked into the unsold inventory. Again, mitigating delays boosts competitiveness. Hence, modal economics should never be an “either-or” scenario. Instead, the focus should be on optimising shipping costs vis-à-vis market timing intelligence.

Exclusively opting for air cargo transportation may be excessive, but it’s necessary sometimes; ideally, modal optimisation covers: the type of order; the best-yielding result combining the different segments of the trade corridor; and timeliness of the trade, among others.

As the calculations are complex and the cost of different modalities is dynamic, it is best to partner with 3PL (third-party logistics) companies with versatile modality options, transparent modal pricing, and the capability to precisely calibrate scenario modelling, for the most competitive margins.

Where corridor expertise saves the day

Strategic partnerships have always been integral for gaming the corridor barriers, market timing intelligence, and multi-modal transportation. In other words, the logistics architecture should be optimised for destination-specific compliance measures, trading slots, and documentation standards. Preferably, having local partners simplifies navigating this maze of considerations.

For example, inventory carrying costs due to customs delays may result in much poorer returns in Japan than in the UAE. End-to-end ESG tracking, on the other hand, is a must for Germany, while markets like Hong Kong require adherence to their warehousing norms, and Egypt has built-in modal-choice complications. Therefore, a one-size-fits-all approach, common in Indian exports, doesn’t cut it.

The vital financial dimension of working capital management & raw material arbitrage

The recent scenario readily offers a fine example of what working capital sophistication can help achieve. Thanks to the import duty waiver for raw cotton and waste imports, there was an 83 per cent jump in their imports. This stockpiling at a subsidised, locked-in price will offer manufacturers and their exporters a definitive edge in the initial period into 2026 over their peers who weren’t as proactive as they were.

Even with working capital at hand, quick action is non-negotiable, given that customer clearance speed and warehouse availability may shrink profitability. Hence, strategic use of working capital, minimising opportunity costs of unsold inventory, and leveraging schemes like the recently announced production-linked incentive loans is critical for the best raw material arbitrage.

The importance of import-export integration

Import quality and efficiency drive export competitiveness. Case in point is the significant chunk of Indian exporters who fail to meet the quality standards mandated by Japan. Any delay in production caused by limited raw material access puts companies that make the cut at risk of failure, especially when compounded by customs delays in Japan’s import processes.

Therefore, when import, production, warehousing, and export departments work following a common strategy, they are likely to avoid any cash flow problem by mitigating overwhelming levels of uncertainty. Thanks to this clever use of working capital, successful exporters can build a self-fulfilling mechanism over time, where faster imports ensure quick exports with better margins, unharmed by inventory carrying.

Best practices aside, what opportunities await in the coming days?

The ongoing bilateral talks with the US are promising, but for concrete measures, many ventures may deem the end of US tariffs uncertain. Until the talks reach a definitive conclusion, the tariffs will continue to fuel the advantage of Bangladesh and Vietnam over India. However, developing trade agreements and other measures spell optimism—ideally guarded optimism.

In terms of domestic reforms, the new GST rationalisation across the textile export value chain is likely to expand disposable capital. Similarly, the withdrawal of Quality Control Orders for synthetic fabrics and raw materials will help Indian textile export ventures to invest more in man-made fabric (MMF) products. This step can bring India’s 70-30 cotton-MMF export ratio at par with global practices and further open up a reliable textile export niche for the Indian business community.

Globally speaking, the Trade and Economic Partnership Agreement (TEPA) signed in late 2024 with the European Free Trade Association (EFTA) has begun paying dividends, since the agreement came into effect on the 1st of October, 2025. The trade bloc puts India at a benefit with Switzerland, Norway, Iceland, and Liechtenstein.

Recently, according to television news, India’s Minister of Commerce and Industry, Piush Goyal, confirmed that the “air is pregnant with possibility”, referring to trade agreements taking on positive notes. A Free Trade Agreement (FTA) between India and Chile is inching towards conclusion. Moreover, India and Israel have also entered discussions on an FTA between the two nations. Most importantly, the possibility of an India-EU FTA continues to progress well. However, until the deals close, the tariff crisis will persist.

Going into 2026, for risk mitigation, exporters must prioritise a multi-faceted plan rather than banking on old practices. However, for most players, making a successful transition into dynamic logistics planning over volume-based shipping strategies will take time, and meanwhile, the proverbial early birds will continue getting the worms.

References

• https://www.newindianexpress.com/business/2025/Nov/11/textile-exports-to-111-countries-see-growth-in-apr-sept-supplies-to-38-countries-see-more-than-50-jump
• https://www.pib.gov.in/newsite/erelcontent.aspx?relid=278694&reg=3&lang=2
• https://thesecretariat.in/article/over-the-demand-warp-under-the-quality-weft-is-the-textile-sector-ready-for-a-reality-check
• https://www.pib.gov.in/PressReleasePage.aspx?PRID=2197522&reg=3&lang=1
• https://www.youtube.com/watch?v=fsQM7__wTDg

About the author:

Jitendra Srivastava is the CEO of Triton Logistics & Maritime, with over 25 years of expertise in international freight forwarding, global sales, and supply chain management. He has positioned Triton as a leader in operational excellence, digital innovation, and sustainable logistics solutions. A sought-after speaker and industry thought leader, Srivastava actively contributes to global trade forums, logistics summits, and policy discussions. Under his leadership, Triton has embraced AI-driven logistics, predictive analytics, and customer-centric solutions. He is the driving force behind TriNext and TriCademy, building a community of logistics innovators shaping the future of global supply chains.