Flat exports, fractured sector, what India’s FY26 textile data really reveals

The latest quick estimates from the Ministry of Commerce & Industry reveal a textile and apparel sector navigating a complex global landscape. During the first nine months of the 2025-26 financial year, spanning April to December, total exports for the sector reached $26,531 million, representing a marginal decline of 0.26 per cent compared to the same period in 2024. While this headline figure suggests a period of stagnation, a deeper narrative emerges when examining the divergence between a struggling textile base and a resilient apparel sector.

The resilience of the apparel engine

Ready-Made Garments (RMG) have emerged as the primary growth driver for the industry, defying broader downward trends. Between April and December 2025, apparel exports grew by 2.36 per cent to reach $11,584 million. This momentum was particularly evident in December 2025, when the segment registered a 2.89 per cent growth over the previous year, totaLling $1,504 million. As A Sakthivel, Chairman of the AEPC, noted that the December performance reflects both the resilience and adaptability of the industry in a challenging global environment. He observed that while demand in key international markets such as the US has been uneven due to inflationary pressures and geopolitical uncertainties, Indian apparel exporters have managed to hold ground through product diversification, improved compliance, and a stronger focus on value-added segments.

Looking ahead, Sakthivel expressed cautious optimism about growth prospects, suggesting that as global demand improves, India is well-positioned to gain market share due to its reliable supply chain and growing design capabilities. He emphasized that with sustained policy support, the apparel sector is expected to return to a stronger growth trajectory in the coming months.

The September turning point and tariff shock

The fiscal year was impacted by a turning point in September 2025. Following the implementation of increased US tariffs in late August, the industry faced a severe tariff shock that saw RMG exports plunge by 10.45 per cent in September alone, dropping to $997.54 million. This period was marked by extreme volatility as buyers briefly shifted orders to competitors; however, the sector demonstrated remarkable agility. By October, the decline narrowed to an estimated 0.5 per cent as Indian firms began absorbing a portion of the tariff costs to retain long-term buyers. This was followed by a sharp recovery in November with an 11.27 per cent growth spurt driven by holiday front-loading and expansion into 111 alternative markets, ultimately leading to the steady 2.89 per cent growth seen in December.

Table: Monthly apparel volatility in FY26

The textile drag and raw material pressures

In contrast to the apparel success story, the broader textile segment, which includes yarn, fabrics, and made-ups faced a persistent downturn. Textile exports declined 2.19 per cent during the nine-month period, totaling $14,947 million. The cotton yarn, fabrics, and made-ups category was particularly hard hit, falling 3.35 per cent over the three quarters and seeing a deeper decline of 3.96 per cent in December 2025 alone.

Analyzing these specific headwinds, Chandrima Chatterjee, executive director of CITI, explained that the de-growth in segments like textiles is tied to specific geographic dependencies. She noted that the de-growth in apparels and textiles is because of the continued uncertainty in the US and the Bangladesh markets, highlighting that India had a big export of cotton yarn and fabric to Bangladesh while the major export of made ups like towels, and curtains was destined for the US. This slump is further reflected in a massive 80.31 per cent rise in the import of raw cotton and waste, which reached $1,657 million during the April-December period as manufacturers sought to bridge domestic supply gaps

Table: December vs. FY26-to-date performance

Outlook and the role of trade agreements

The future of the industry is increasingly anchored in new trade corridors. Sakthivel pointed out that with the India-EU FTA likely to be concluded within a fortnight and the UK FTA nearing implementation, the Indian apparel industry will gain a tremendous edge in market access to these developed economies. He extended his gratitude to the Prime Minister and Commerce Minister for their efforts in concluding these FTAs, which are expected to provide the necessary competitiveness to counter global headwinds. By leveraging these agreements and focusing on value-added segments, the industry aims to offset the marginal 0.26 per cent cumulative decline and finish the fiscal year on a positive note.