In a major confirmation of a manufacturing resurgence, India’s textile sector witnessed a 14-year high in capital expenditure (Capex) during FY25.
According to data from the Economic Survey 2025–26 and industry reports, the surge is driven by a “perfect storm” of policy incentives, global supply chain shifts, and a massive push for modernization. Total investments in the sector for the year are estimated to have crossed ₹60,000 crore, signaling the strongest investment cycle since 2011.
1. The Investment Drivers: Why Now?
The 14-year peak in Capex is the result of three core “engines” working in tandem to revitalize the industry.
- The “China+1” Tailwind: Global apparel brands have significantly increased their sourcing from India to diversify away from China. This has forced Indian manufacturers to rapidly expand capacity to handle larger, high-speed orders.
- PM MITRA & PLI Schemes: The PM MITRA (Mega Textile Parks) scheme has already secured over ₹27,434 crore in signed MoUs. Simultaneously, the Production Linked Incentive (PLI) scheme for Man-Made Fibre (MMF) and Technical Textiles has seen 40+ companies commence production.
- Modernization (ATUFS): The Amended Technology Upgradation Fund Scheme has incentivized the replacement of outdated looms with high-speed, shuttle-less machinery, improving productivity by an estimated 15–20%.
2. Key Financial Metrics: FY25 at a Glance
The sector’s growth is reflected in record-breaking export and production numbers.
| Metric | FY25 (Actual/Estimated) | FY24 (Actual) | Change |
| Total Textile Exports | $37.75 Billion | $35.87 Billion | ↑ 5.2% |
| Garment Exports | $15.99 Billion | $14.53 Billion | ↑ 10.0% |
| Investment Commitments | ~₹60,000 Crore | ~₹35,000 Crore | ↑ 71% |
| Domestic Market Size | ₹9.3 Lakh Crore | ₹8.2 Lakh Crore | ↑ 13.4% |
- Market Share: India currently holds a 3.9% share of the global textile trade, ranking as the world’s 6th largest exporter.
- Trade Surplus: The sector maintained a robust trade surplus of $28.2 billion in FY25.
3. Shift to Man-Made Fibres (MMF) & Technical Textiles
A significant portion of the FY25 Capex was directed toward non-cotton segments, where India has traditionally been weak but is now rapidly gaining ground.
- MMF Growth: Exports of Man-Made Textiles contributed $3.1 billion (15%) to the total export basket in the first half of FY25.
- Technical Textiles: The National Technical Textiles Mission (NTTM), with a ₹1,480-crore outlay, has sparked investments in “future fabrics” used in healthcare, automotive, and infrastructure.
- Duty Exemptions: To support this shift, the Budget 2025–26 fully exempted high-speed Rapier and Air Jet looms from customs duty, further lowering the cost of expansion.
4. Future Outlook: The $100 Billion Target
With the foundation laid in FY25, the government and industry have set a Vision 2030 target of $100 billion in exports.
- New FTAs: The recent trade deals with the US (18% tariff cap), the European Union, and the UK are expected to provide a “golden phase” for exporters starting in late 2026.
- Sustainability Focus: A rising portion of the new Capex is being allocated to recycling technologies and waterless dyeing, as global buyers demand “Green Textiles” compliance by 2027.
Conclusion: Weaving a New Narrative
The 14-year high in Capex marks the end of a long period of stagnation for the Indian textile industry. By moving from a “cottage industry” mindset to a “global scale” manufacturing model, the sector is finally leveraging its status as the second-largest employer in the country. In 2026, the focus will shift from buying the machines to running them at maximum capacity to capture the vacuum left by shifting global trade lanes.
