A Sector Growing Through Global Turbulence
India’s textile sector is entering a new growth cycle even as it faces one of its most turbulent global trade environments. The United States has imposed steep tariffs, with effective import duties on Indian textiles touching 63.9%. As a result, the industry is accelerating its push into newer global markets to reduce reliance on the US.
Rubix Data Sciences’ latest Industry Insights Report highlights how diversification, rising investments and targeted government policies are helping the sector navigate this volatility and build long-term strength.
Export Diversification Across 111 Markets
Between April and September 2025, India recorded year-on-year export growth in 111 countries, showing a clear shift toward risk diversification. Government outreach in 40 priority markets has delivered strong results, with 38 countries reporting over 50% growth in imports of Indian textiles.
A key driver in this expansion is the India-UK FTA, signed in July 2025. The agreement offers duty-free access to 99% of Indian textile and apparel exports. This is expected to increase exports to the UK by 30%–45% by 2030, and may help India double its home textiles market share in the UK within three years.
Robust Domestic Fundamentals
India’s textile and apparel industry was valued at USD 174 billion in FY2025, and is projected to reach USD 350 billion by FY2031, growing at a 12.4% CAGR. However, further progress depends on a steadier global trade environment, especially in the US, India’s largest export market.
Technical Textiles Drive the Next Growth Wave
The industry’s most dynamic segment is technical textiles. The market is expected to rise from USD 29 billion in 2024 to USD 123 billion by 2035, supported by demand from healthcare, defence, infrastructure and mobility.
Technical textile exports reached USD 2.9 billion in FY2025, growing at an 8% CAGR. Packtech and Indutech account for nearly two-thirds of export volumes, showing strong global appetite for performance-driven materials.
Rising Digital Consumption and Retail Expansion
India’s domestic fashion landscape is shifting quickly.
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Online apparel sales are projected to grow 17% in FY2025 and maintain a 15% CAGR through FY2030.
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Quick commerce has entered the fashion segment, adding new channels for growth.
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India remains attractive to global brands: 27 new international labels entered in 2024, double the previous year.
Strong Startup Momentum
Innovation continues to accelerate:
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DPIIT-recognised textile startups grew 3.7x between 2020 and 2024.
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Apparel brand startups raised USD 120 million in 2025 (till October), marking a 2.6% year-on-year increase.
Government Support to Stabilise Volatility
The government is introducing several measures to offset the impact of global uncertainty. These include:
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Revoking QCOs on key polyester inputs, which had increased costs by nearly 30%
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A ₹450 billion export support package
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Extension of duty-free cotton imports till 31 December 2025
These steps come as domestic cotton output has dropped sharply—from 386 lakh bales in 2014–15 to 294.25 lakh bales in 2024–25—while imports have almost doubled. Exporters continue to await clarity on BIS contamination standards, which remain a major concern.
Persistent Structural Challenges
Despite progress, the sector faces several long-term issues:
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Large parts of the value chain remain unorganized, limiting their ability to meet global quality and sustainability standards.
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Competition from Bangladesh, Vietnam, Cambodia and Indonesia is intensifying due to their lower labour costs and stronger trade agreements.
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India generates 7.7 million tonnes of textile waste annually, while global brands increasingly demand circularity, recycled inputs and low-carbon production.
These challenges require faster adoption of traceability, compliance and sustainable manufacturing practices.
Expert Insight from Rubix Data Sciences
“India’s textile sector is navigating one of its most complex periods in years. Tariffs, shifting global demand, sustainability pressures and fierce competition are reshaping the landscape. But the industry is responding with agility, expanding into new markets, investing in technology, moving up the value chain and embracing circularity. At Rubix, our mission is to equip businesses with the intelligence needed to decode this volatility, manage risk proactively, and make confident decisions in a rapidly changing global economy.”
— Mohan Ramaswamy, Co-founder and CEO, Rubix Data Sciences
The Road Ahead
To build deeper global competitiveness, Rubix Data Sciences emphasises sustained investments in:
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Innovation and product R&D
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Technology adoption and automation
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Raw material security
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Sustainable and circular manufacturing
With diversified exports, growing investor confidence and expanding digital retail channels, India’s textile industry is well positioned to drive the country’s next phase of manufacturing-led growth.
