SIMA urges fast-track PLI for synthetics to shield sector from western tariffs

India’s textile sector is looking to change production strategies as fresh wave of Western tariffs and erratic domestic cotton yields squeeze margins. Facing 11 per cent increase in domestic raw cotton prices over the past quarter, major spinning mills are aggressively expanding their synthetic and recycled fiber operations to insulate export revenues.

While traditional cotton yarn exports to Europe declined 6 per cent this fiscal year due to high input costs, domestic demand for polyester-viscose blends increased by 14 per cent. Experts say, relying entirely on natural fibers leaves manufacturers highly vulnerable to geopolitical trade disruptions and climate-induced crop volatility. Sector experts emphasize, upgrading infrastructure to support high-performance technical textiles offers a viable pathway to sustain international competitiveness. To reduce these risks, the Southern India Mills’ Association (SIMA) has urged the Ministry of Textiles to fast-track production-linked incentives (PLI) for man-made fibers, aiming to reduce dependence on volatile agricultural commodities.

Analysts project that mills diversifying into synthetic blends could see operating margins stabilize by 180 basis points by next year, effectively counterbalancing the impact of punitive Western import duties.

A major hub for cotton processing, India’s textile sector produces a comprehensive range of yarns, fabrics, and ready-made garments for primary markets across North America and Europe. Current expansion strategies prioritize advanced technical textiles and eco-friendly synthetic blends to enhance global market share. The sector targets a total export value of $65 billion by late 2026, building upon its historic foundation as the nation’s largest net foreign exchange earner.