Chandandeep Singh: Innovation is no longer optional; it is the foundation of global competitiveness

Recent tariff actions by the US have brought renewed focus on the vulnerabilities and opportunities within India’s textile and apparel sector. As exporters navigate rising cost pressures, shifting buyer preferences and an increasingly competitive global landscape, questions around market diversification, product strategy, technology adoption and policy support have become more critical than ever. In this interview, Divya Shetty speaks with Chandandeep Singh, Senior Consultant, Gherzi (India), to explore the impact of US tariffs and the strategic pathways for strengthening India’s export resilience.

How have the US tariffs affected the industry, and what key lessons can the Indian textile sector draw from this episode? In your view, how crucial is it for Indian textile exporters to diversify their export markets?

India’s textile and apparel (T&A) exports to the US  exceeds $10 billion, making up 28 per cent of India’s total T&A exports in 2024. There is 10 per cent growth in US imports from India in Q1-Q2 compared to the same period of last year.  This heavy reliance on the US market makes the recent tariff imposition highly consequential for the industry.

From the buyer’s perspective, the US now sources approximately 9 per cent of its apparel imports from India, up from 6 per cent in 2015, ranking India third among supplier. With apparel and home textiles forming 90 per cent of exports. These tariffs on finished products significantly affect the performance.

While India performs well  on quality, reliability, and compliance which a US buyer typically seeks for, but cost remains the most influential factor, though its importance has declined over years, as highlighted by a recent USITC survey. Tariffs increase the landed cost, eroding competitiveness against countries enjoying preferential trade agreements. This creates a real risk of losing buyers to rivals.

The impact could cut US exports by up to 15 per cent, a substantial setback for the sector.

This episode underscores the critical need for diversification:

• Geographic diversification: Target EU (larger than the US), UK, Japan, and Australia, for apparel, home textiles, and technical textiles.
• Product diversification: Expand into technical textiles and value-added segments.
• Strategic manufacturing: Utilise overseas plants in low-cost, low-tariff regions
• Intermediate exports: Export yarns and fabrics to tariff-friendly countries.

India’s stagnant 6 per cent EU share signals untapped potential. However, competitors enjoy preferential access, making trade agreements and policy support vital.

Diversification not only reduces vulnerability but also enhances resilience and growth prospects in a highly competitive global textile landscape.

What kind of product diversification strategies should Indian exporters adopt to stay competitive in these new markets?

To thrive in both emerging and established markets, Indian exporters should adopt a four-pronged strategy:

Move up the value chain

• Focus on high-value finished products such as apparel, home textiles, and technical textiles.
• Technical textiles, in particular, offer significant growth opportunities in sectors like automotive, healthcare, and industrial applications.
• Invest in design capabilities, branding, and customisation to differentiate from low-cost competitors.

Expand the MMF (Man-Made Fibre) value chain

• MMF-based products are witnessing rapid global demand growth, driven by performance attributes like durability and versatility.
• MMF is also a critical raw material for technical textiles, making its expansion strategically important.
• Develop end-to-end capabilities from fibre to finished goods to capture more value.

Accelerate product development and innovation

• Speed is a competitive advantage in global markets. Adopt fast-track product development cycles to respond to changing trends.
• Invest in R&D for functional fabrics
• Leverage digital tools for virtual sampling and predictive trend analysis to reduce lead times.

Embrace Environmental and Social Responsibility

• Sustainability should be positioned as a differentiator, not just compliance.
• Focus on eco-friendly fibres, water-efficient processes, and circular economy models.
• Certifications like OEKO-TEX, GOTS, and Fair Trade can enhance credibility and attract conscious buyers.

Bottomline, diversification is not just about entering new markets—it’s about offering innovative, sustainable, and value-added products that align with global demand. Companies that combine speed, sustainability, and specialisation will lead the way.

How can Indian textile manufacturers leverage technology and innovation to strengthen supply chain resilience and reduce dependence on traditional markets like the US?

Innovation is no longer optional—it is the foundation of global competitiveness. For Indian manufacturers, building resilience and reducing dependence on markets like the US requires a multi-dimensional approach.

First, foster collaboration across the value chain. Integrated ecosystems connecting raw material suppliers, yarn producers, fabric manufacturers, and apparel makers can transform agility. Collaborative platforms enable better demand forecasting, faster response to disruptions and shared innovation hubs can accelerate new product development while reducing duplication.

Second, implement end-to-end digital solutions. Digital supply chain management systems and traceability tools enhance transparency, ensure compliance and build trust with global buyers – critical in today’s sustainability-driven market.

Third, embrace automation in production. Robotics in cutting, sewing, and packaging can boost productivity, reduce lead time and minimise human error making operations more cost efficient and scalable.

By embedding technology and innovation, Indian manufacturers can meet diverse global standards, respond swiftly to geopolitical and economic shifts and build resilience against supply chain shocks through integrated, tech-enabled networks.

From a policy standpoint, what kind of trade facilitation measures or industry support do you think could accelerate diversification and strengthen India’s export competitiveness?

Policy support is pivotal at this juncture. The first priority should be concluding the EU FTA, as the EU represents a larger market than the US for finished textile products. FTAs must include flexible rules of origin and mutual recognition of standards to simplify compliance.

Government schemes for technical textiles are a step in the right direction. But we need to go further. Investments in speciality fibres such as Polyamide 66, Modified Acrylics, and Aramids – are critical for high-performance technical textiles and should be actively encouraged.

Penetrating new markets is resource-intensive, especially for SMEs. The government can ease this by offering marketing assistance programs, subsidised participation in international trade fairs, export promotion incentives for diversification beyond traditional markets. Additionally, leveraging digital export platforms can help connect Indian manufacturers with global buyers quickly and efficiently.

In your opinion, how can India’s trade and export policies evolve to better align with shifting global demand patterns and sustainability expectations?

Global demand is shifting toward sustainability, innovation, and traceability, and India must  adapt its trade policies to position itself as a responsible and competitive sourcing destination. Sustainability should become a strategic differentiator not just compliance making “Made in India” synonymous with eco-conscious production.

India can leverage its strong cotton-based value chain and existing recycling ecosystem, while accelerating upcycling initiatives. Policy incentives for circular economy models, water and energy efficient machinery and green technologies will be crucial.

The government’s upcoming “Sustainable Bharat Mission – Textile”- where Gherzi is playing a pivotal role as a knowledge partner to the Mission- is a step in the right direction.