In a challenging year for global trade, India’s textiles and apparel exports recorded a 2.2% decline, settling at $35.8 billion for the fiscal year ending March 31, 2026 (FY26).
The data, released on April 24, 2026, reflects a complex landscape where traditional garment hubs struggled while specific technical categories showed surprising resilience.
1. The Numbers: Apparel vs. Textiles
The overall drop was primarily driven by a slowdown in the “ready-made garment” (RMG) segment, which faced intense competition and reduced demand in Western markets.
| Category | FY26 Export Value | Change (YoY) |
| Ready-Made Garments (RMG) | $15.2 Billion | ▼ 4.1% |
| Cotton Textiles | $11.4 Billion | ▼ 1.8% |
| Technical Textiles | $3.1 Billion | ▲ 8.4% |
| Man-made Fibres (MMF) | $4.2 Billion | ▼ 2.5% |
| Others (Jute, Handicrafts) | $1.9 Billion | — |
- The Demand Gap: High inflation and interest rates in the US and European Union (India’s largest buyers) led to a “de-stocking” phase by major global retailers, directly impacting order volumes for Indian factories.
- Geopolitical Strain: Shipping delays and a 5x increase in freight costs due to the Red Sea and Strait of Hormuz crises made Indian exports less price-competitive in the final quarter of the fiscal year.
2. Competitive Pressure: The “Vietnam-Bangladesh” Factor
India continues to lose market share in basic, high-volume apparel to neighbors with lower labor costs and preferential trade access.
- Duty Disadvantage: Unlike Bangladesh or Vietnam, Indian exporters face import duties of 9% to 12% in many EU markets, putting them at a significant price disadvantage.
- The “PLI” Lag: While the government’s Production Linked Incentive (PLI) Scheme 2.0 for textiles has seen interest, the actual “on-ground” capacity for man-made fibers—where global demand is shifting—has been slow to materialize compared to competitors.
3. The Bright Spot: Technical Textiles & FTA Hopes
Despite the overall dip, the industry is seeing a structural shift toward high-value engineering.
- Technical Growth: The 8.4% growth in technical textiles (industrial filters, medical wraps, and protective gear) suggests that Indian manufacturers are successfully moving up the value chain.
- FTA Outlook: The industry is pinning its hopes on the India-UK Free Trade Agreement (FTA), which analysts believe could immediately boost garment exports by $1–2 billion by removing restrictive duties.
- PM MITRA Parks: Construction has accelerated on the seven integrated textile parks, which the Ministry of Textiles expects will reduce logistics costs by 10% to 15% once operational in late 2026.
4. Industry Sentiment for FY27
Exporters are cautiously optimistic for the new fiscal year as US and EU inventory levels normalize. However, many are calling for a recalibration of the RoDTEP (Remission of Duties and Taxes on Exported Products) rates to offset the spike in energy and logistics costs that plagued the March quarter.