India’s textile industry expanded to nearly ₹16.79 lakh crore (US$190 billion) in FY26, according to a report by Rubix Data Sciences. The sector aims to grow to ₹33.27 lakh crore (US$350 billion) by 2030, reinforcing its importance as a major contributor to manufacturing, exports and employment.
The Central Government is considering a five-year Textile Expansion and Employment (TEEM) Scheme with a proposed outlay of ₹40,000 crore (US$4.21 billion). The initiative aims to modernise machinery, promote advanced technologies and upgrade traditional textile clusters to improve productivity and competitiveness.
India’s textile and handicraft exports showed signs of recovery, increasing 10.30% year-on-year during April–August 2026, following a 2.70% decline to ₹3.17 lakh crore (US$35.80 billion) in FY26. Textile imports rose 17.10% to ₹84,835.2 crore (US$9.60 billion) in FY26, but exports remained approximately 3.7 times the value of imports.
Readymade garments accounted for 44% of India’s textile exports, while man-made fibre textiles contributed 15%, highlighting the importance of apparel manufacturing and diversified textile products in the country’s export basket.
Rising Input Costs Challenge Manufacturers
Despite the export recovery, rising raw material costs remain a major concern for the industry. Cotton yarn prices climbed approximately 60% to ₹400 per kilogram in September 2026, compared with ₹250 per kilogram in early 2026. The increase came amid a decline in domestic cotton production to 290.91 lakh bales during the 2025–26 season.
To ease cost pressures on textile mills, the government extended the exemption from the 11% cotton import duty until October 31, 2026, providing temporary relief to manufacturers dependent on imported cotton.
Export Markets Show Mixed Performance
The United States remained India’s largest textile export destination in FY26, accounting for 31% of total shipments, followed by the European Union at nearly 16%. However, exports to the US declined by around 7%, while shipments to major European markets increased by 9%.
In response to shifting trade conditions and market uncertainties, Indian textile manufacturers are diversifying their export destinations to reduce dependence on individual markets and strengthen their international presence.
Meanwhile, investment proposals under the seven approved PM Mega Integrated Textile Region and Apparel Parks (PM MITRA) reached ₹68,590 crore (US$7.21 billion) by August 2026. These investments are expected to support capacity expansion, infrastructure development and modernisation across the textile value chain.
With export growth recovering and major investments planned, India’s textile industry is positioning itself for long-term expansion. Achieving the US$350 billion target by 2030 will depend on improving manufacturing efficiency, managing raw material costs, diversifying export markets and strengthening the sector’s competitiveness in global trade.