Unlocking Export Potential

Buoyed by favourable geopolitical dynamics and supportive policies, the textile industry is poised for a brighter future in exports. Divya Shetty examines how well the sector is on track to achieve the ambitious $100 billion export target by 2030.

The performance of India’s textile exports in 2024 drew a wide spectrum of reactions from industry leaders and stakeholders, reflecting the mixed outcomes of a challenging yet eventful year. While some viewed the developments with cautious optimism, others highlighted specific hurdles that tempered the year’s progress.

Rahul Mehta, Chief Mentor, CMAI, captures the essence of this dual narrative as he says, “The year 2024 began on a sluggish note, with conditions resembling the challenges faced in 2023. However, in the second half of the year, there was an upswing, with growth rates between eight-10 per cent over the corresponding period. Notably, in October, we observed significant growth due to a combination of factors. Firstly, the on-going disturbances in Bangladesh have led buyers to consider India as an alternative sourcing destination. Additionally, there has been some recovery in the US market, providing an overall advantage.” Mehta’s remarks underscore the pivotal role of geopolitical shifts and recovering demand in boosting India’s textile exports, though he tempered his optimism by noting that the base year of 2023 was relatively low.

KM Subramanian, President, Tirupur Exporters’ Association (TEA) and Chairman of KM Knitwear, highlights the impact of global manufacturing trends and international trade negotiations. “After the COVID pandemic, developed economies shifted their manufacturing bases from China to other countries. With the duty-free trade agreement between Europe and Bangladesh extended until 2027, large retail companies are relocating to India, and existing businesses have increased demand from India. Political changes in the US have created more trade opportunities for India due to the country’s stance on China. Tariff-free trade negotiations with the UK are nearing completion and have given rise to great optimism,” he states.

The resilience of India’s textile industry was another recurring theme, as noted by the official spokesperson of Globe Textiles. “The Indian textile industry has shown resilience and steady growth in exports over the past year. Despite global challenges, the sector has seen positive growth, driven by strong demand for products such as apparel, home textiles, and fabrics from key international markets like the US, Europe, and the Middle East,” the spokesperson comments. However, they also acknowledged significant challenges such as fluctuations in raw material prices and supply chain disruptions. “Still, the sector continues to play a significant role in India’s export portfolio, contributing notably to employment and economic growth,” they add, reinforcing the industry’s importance to the national economy.

Kapil Pathare, Director, VIP Clothing, points out both the strengths and vulnerabilities of the industry. “The Indian textile industry has demonstrated remarkable resilience over the past year. We have exported to the US, Germany, Ghana, Zambia, Oman, UAE, Bahrain, Kuwait, Saudi Arabia, and Mauritius, basis which we can say, while there has been growth in certain segments like cotton, there have been challenges in others due to global economic slowdown and increased competition,” he remarks. Pathare’s comments highlight the uneven performance across segments and the broader impact of global economic conditions and geopolitical factors like the Russia-Ukraine conflict.

Adding another dimension to the mixed picture, the official spokesperson of Gokaldas Exports shares, “The Indian textile industry experienced mixed outcomes, with the domestic sector growing by 10 per cent Y-o-Y, while exports declined by nearly 3 per cent. Specifically, Indian apparel exports dropped by 10 per cent Y-o-Y in FY24, as major consuming markets like the US, EU-27, and UK reduced their imports due to retailers holding high inventory levels. As retailers have reached optimal inventory levels, it is expected that apparel exports will continue to recover, with early signs of revival evident since the start of H2 2024.”

While the outlook appears brighter compared to earlier, it is important to acknowledge that the base year of 2023 was relatively low. Therefore, while the positive shift is encouraging after years of static or minimal growth, it is essential to remain cautiously optimistic.

Rahul Mehta, Chief Mentor, CMAI

Meanwhile, Kailash Hakim, President, FOSTTA, provides a more optimistic perspective on Surat’s textile industry. “Over the past year, India’s textile industry including Surat has demonstrated prosperity and growth in its export sector. During the April-October period of the fiscal year 2024-25, textile and apparel exports, including silks, increased by 7 per cent, reaching $21.35 billion, up from $20 billion in the same period of the previous financial year,” notes Hakim. He emphasises the significant contributions of categories like ready-made garments and man-made textiles, while acknowledging the need to address production challenges and regulatory limitations to sustain growth.

Although the year 2024 was a mixed bag for India’s textile exports, the industry seems positive for 2025.

Challenges

While production costs, global competition, and quality standards remain persistent concerns, emerging opportunities such as shifting supply chains, geopolitical dynamics, and advancements in technology are paving the way for growth.

Subramanian, highlights that “Indian textile exporters face challenges like higher production costs, quality perception issues, infrastructure inefficiencies, and fluctuating raw material prices, especially cotton.” He also underlines the sector’s proactive approach to capitalising on opportunities such as “shifting supply chains from Bangladesh and Vietnam, growing demand for sustainable textiles, and advancements in technology like automation and digital printing.” Free trade agreements with regions like the UAE and EU have offered better market access, enabling exporters to explore newer avenues.

Enhancing logistics and infrastructure to reduce costs and improve lead times, along with investing in skill development for the workforce, will further boost competitiveness in the global market.

KM Subramanian, President, Tirupur Exporters’ Association (TEA) and Chairman of KM Knitwear

Globe Textiles’ spokesperson echoed these concerns, stating that “rising raw material costs, global competition from low-cost manufacturing hubs like Bangladesh and Vietnam, infrastructure inefficiencies, and trade barriers are impacting the industry.” They emphasise the sector’s need to overcome challenges related to “meeting international quality standards consistently and addressing logistics delays and high shipping costs.”

For Pathare, global competition is one of the most significant challenges, as countries like China, Bangladesh, and Vietnam continue to dominate the market. He remarks, “Rising input costs, including raw materials, energy, and logistics, are impacting profitability. Additionally, meeting stringent international standards related to sustainability, labour, and environmental issues is a challenge, as companies must adapt to these evolving regulations.”

Gokaldas Exports brought attention to the fragmented nature of the Indian apparel industry, which “prevents sustained investments required for continued growth.” They point out that “the absence of a comprehensive man-made apparel value chain handicaps Indian players, preventing them from fully participating in the global market, where man-made fibre constitutes 65 per cent of the total share.” However, they acknowledge that geopolitical issues in Bangladesh and rising labour costs in Vietnam are creating opportunities for Indian exporters to emerge as a reliable alternative for global sourcing.

Currency fluctuations are affecting export competitiveness, making it more difficult to maintain consistent pricing and profit margins in international markets.

Kapil Pathare, Director, VIP Clothing

Hakim outlines specific challenges faced by Surat’s textile exporters, noting that “stiff competition from China and Bangladesh, rising raw material prices, and stringent export regulations in markets like the EU and USA are significant hurdles.” He emphasises that “labour shortages and increased wages in India contribute to higher operational costs,” while also pointing out that “limited use of advanced technologies and automation reduces productivity and efficiency.”

Across the board, Indian exporters face significant headwinds, including fluctuating raw material prices, infrastructure bottlenecks, and competitive pressures from other manufacturing hubs. However, the evolving geopolitical landscape and evolving trends (see Table 1) are presenting a silver lining.

Table 1: Key markets driving Indian textile exports

Government policies

The Indian textile industry has witnessed remarkable policy-driven advancements aimed at boosting exports, yet industry leaders believe more focused initiatives are needed to unlock its full potential. Highlighting the strides made, Subramanian remarks, “Recent government policies have significantly boosted India’s textile exports. Trade agreements like FTAs with the UAE and EU have reduced tariffs, enhancing competitiveness. Export incentives such as Rebate of State and Central Taxes and Levies (RoSCTL) provide financial support, making Indian textiles more cost-effective globally.” He further emphasised how subsidies under the Textile Upgradation Fund Scheme (TUFS) have improved productivity and quality, collectively expanding market opportunities.

Echoing this, Globe Textiles points out the transformative role of Special Economic Zones (SEZs) in augmenting exports, saying, “Special Economic Zones (SEZs) are growth engines that can boost manufacturing, augment exports and generate employment. The Government has introduced the scheme of SEZs in order to provide a hassle-free operational regime and encompassing state-of-the-art infrastructure and support services.” The policy’s focus on infrastructure and operational efficiency is fostering an environment ripe for exponential growth in textile exports.

Surat’s exporters have been exploring and entering new regions, including Anguilla, Serbia, Georgia, Sweden, Cyprus, Azerbaijan, Iran, Zambia and Russia. Emerging markets such as Brazil and Vietnam have also been identified as having significant potential for India’s and textile exports.

Kailash Hakim, President, FOSTTA

Despite these advancements, Pathare highlights the need for continuous improvement in policy support. “Trade agreements like the FTA with the UAE have opened new markets. Export incentives and subsidies have provided much-needed support, though there’s always scope for further improvement. Consistent policy support is crucial for long-term growth,” he states. This underscores the industry’s reliance on stable and forward-looking policies to maintain global competitiveness.

From the perspective of Gokaldas Exports, the continuation of existing schemes and expansion of incentives are pivotal. “The central government has introduced key policy initiatives, such as the continuation of the RoSCTL scheme until 2026. Additionally, ongoing discussions to expand the product coverage under the scheme and to lower the minimum investment eligibility criteria are seen as key triggers to encourage investment through the Production Linked Incentive (PLI) scheme and the Mega Integrated Textile Region and Apparel (MITRA) initiative,” they share.

Hakim sheds light on the region-specific efforts, particularly in Surat, driven by Gujarat’s Textile Policy 2024. He notes, “The Gujarat Government’s Textile Policy 2024, introduced in October 2024, aims to boost the textile sector by offering substantial incentives. Considerably, the policy provides a capital subsidy ranging from 10-35 per cent of the eligible fixed capital investment, with a capital of Rs 1 billion. Additionally, an interest subsidy of 5-7 per cent on eligible fixed capital investment is available for up to eight years.”

In addition to policies, industry experts called for targeted solutions to specific challenges. Mehta stressed the need for a garment-oriented PLI scheme, pointing out that, “The current scheme is difficult for mid-level textile units to access, and with the right investment, these units could become large garment manufacturers. We propose the maximum investment limit for a garment unit be set at around Rs 100-120 million, which we believe would be a significant improvement.” Another critical recommendation was directed at protecting MSME vendors in cases of corporate bankruptcies. “When an organisation or corporation goes bankrupt and enters the NCLT process, vendors—particularly those from the MSME sector—are left with little recourse and typically receive no payments for their shipments. We recommend that MSME vendors be treated on par with secured creditors to ensure they are given fair consideration in such situations,” they urge.

Figure 1: Exports and imports of Indian technical textiles in 2023-24.

Source: DGCI&S and Wazir Analysis

While the sector has benefitted immensely from policy interventions, there remains a call for tailored measures to ensure inclusivity, consistency, and sustained growth. By addressing challenges specific to mid-level units, MSMEs, and regional players, the government can unlock untapped potential, fostering a more vibrant and competitive textile industry poised for global leadership.

Way forward

Figure 2: Global textile and apparel trade in 2024.

Source: Customs Statistics, Eurostat, GSO, EPB, DGCI&S, TUIK, OTEXA and Wazir Analysis.

The Indian textile industry is poised for transformative growth, with exports projected to reach $100 billion by 2030, up from $34 billion in FY24. This anticipated growth is fuelled by a global surge in demand for sustainable textiles, technical fabrics (see Figure 1), and traditional products, coupled with supportive government policies and shifting global supply chains. As Hakim aptly states, “Indian textile exports are projected to grow significantly, reaching $100 billion by 2030, driven by rising global demand, favourable trade policies, and shifting supply chains.” This optimism is echoed by experts across the industry, who also emphasise the strategies required to maintain competitiveness in the global market.

Subramanian highlighted the critical role of sustainability in this growth story, emphasising that “industry players should focus on sustainability by adopting eco-friendly practices. Investing in technology can improve efficiency and innovation. Expanding markets like technical fabrics while strengthening trade relations through Free Trade Agreements (FTAs), will help capture new opportunities.” These measures, he adds, should be complemented by enhancing logistics and infrastructure to reduce costs and improve lead times, as well as skill development for the workforce.

Pathare offered a similar vision, stating, “Indian textile exports have the potential for substantial growth in the next 5-10 years.” To achieve this, he suggested focusing on innovation to develop high-value, differentiated products, embracing eco-friendly certifications, improving productivity through technological advancements, and building a skilled workforce. Pathare also highlighted the importance of brand building to promote Indian textiles globally, underscoring that these efforts would position India as a global leader in textiles.

A broader market perspective reveals immense opportunities. The global apparel market is projected to grow at a compound annual growth rate (CAGR) of 4 per cent, reaching $2.3 trillion by 2030, while the global textile and apparel trade is expected to expand to $1.2 trillion (see Figure 2). These trends, combined with external factors like rising labour costs in competing countries and trade tensions, are expected to drive increased sourcing from India. Domestic policy measures such as the RoSCTL scheme, Production Linked Incentive (PLI) scheme, and MITRA initiative, along with state government subsidies, are expected to play a significant role in enhancing capacity and achieving economies of scale.

For Mehta, sustainability and technological adoption remain pivotal. He emphasised that the industry’s ability to stay competitive globally depends on expanding markets like technical fabrics and strengthening trade relations through FTAs. Mehta also pointed out that enhancing logistics and infrastructure to reduce costs, along with skill development, will be instrumental in bolstering India’s global competitiveness.

Adding to this, Hakim called for strengthening branding and design capabilities while leveraging global platforms such as trade fairs to position Indian textiles as premium offerings. These efforts would not only attract international buyers but also help Indian players create a niche in the fiercely competitive global market.

In conclusion, the Indian textile industry is on the cusp of a remarkable transformation, with an ambitious export target of $100 billion by 2030. The path to achieving this lies in a multi-pronged approach: embracing sustainability, driving innovation, leveraging technology, optimising supply chains, and expanding into high-value segments like technical textiles. The combination of favourable trade policies, proactive government support, and industry resilience presents a golden opportunity for India to emerge as a global textile powerhouse.