India’s textile industry has expanded to nearly $190 billion in FY26 and is targeting $350 billion by 2030, supported by robust domestic demand, increased manufacturing investments and growing export opportunities, according to a report by Rubix Data Sciences.
The sector, one of India’s major employment generators, is also expected to benefit from a proposed Rs 400 billion, five-year Textile Expansion and Employment (TEEM) Scheme. The proposed initiative aims to upgrade machinery, introduce advanced technologies and modernise traditional textile clusters.
The industry’s growth outlook comes amid a recovery in overseas shipments. Textile exports, including handicrafts, increased 10.3% year-on-year during April–August 2026, following a 2.7% decline in exports to $35.8 billion in FY26. Meanwhile, textile imports rose 17.1% to $9.6 billion during FY26.
Despite the decline in annual exports, India remained a net exporter, with outbound shipments valued at nearly 3.7 times imports. Readymade garments accounted for 44% of textile exports, while man-made fibre textiles contributed 15%.
Export Diversification Gains Momentum
The United States remained India’s largest textile export market in FY26, accounting for 31% of shipments, followed by the European Union at nearly 16%. However, trade uncertainty in the US and changes in trade measures have encouraged Indian manufacturers to diversify their export destinations.
Shipments to the US declined approximately 7% in FY26, while exports to major European markets increased 9%.
Raymond Lifestyle plans to reduce the US share of its exports from 65% to between 55% and 60% over the next two years. Kitex Garments, whose exports are heavily concentrated in the US market, intends to reduce its exposure from nearly 100% to between 30% and 35% over the next two to three years.
Tushar Bhaskar, President of Rubix Data Sciences, said the sector had demonstrated resilience, with exports recovering during the first five months of FY27 despite persistent external pressures.
“Trade uncertainty in the US market, a rise of approximately 60% in cotton yarn prices, and freight disruptions are adding to the pressure,” Bhaskar said, emphasising the need to diversify export destinations and strengthen cost competitiveness.
Rising Cotton Yarn Prices Pressure Manufacturers
Input cost inflation has emerged as a significant challenge for textile manufacturers. Cotton yarn prices increased approximately 60%, reaching Rs 400 per kg in September 2026 from Rs 250 per kg in early 2026.
The increase coincided with a decline in domestic cotton production to 290.91 lakh bales in the 2025–26 season, compared with 352.48 lakh bales in 2020–21.
To support textile mills and ease raw material costs, the government extended relief through an exemption from the 11% cotton import duty until October 31, 2026.
Higher raw material costs, freight disruptions and uncertainty in key export markets are adding to the pressure on manufacturers, reinforcing the importance of supply-chain resilience and improved production efficiency.
Textile Parks Attract Investment
Investment in textile infrastructure is providing additional momentum to the sector. Investment proposals under the seven approved PM Mega Integrated Textile Region and Apparel Parks (PM MITRA) reached Rs 685.9 billion by August 2026.
Major corporate producers, including Grasim Industries and Vardhman Textiles, are among the companies undertaking significant expansion initiatives.
As India works towards its $350 billion textile industry target by 2030, the sector’s prospects will depend on sustained investment, modernisation, competitive input costs and the ability of manufacturers to expand their presence across global markets.
The combination of domestic demand, infrastructure development and export diversification could strengthen India’s position in the global textile and apparel value chain, even as trade and cost pressures continue to challenge the industry.