India’s Readymade Garment (RMG) exports recorded a 6% year-on-year growth in the early months of 2026, showcasing sector resilience despite a complex geopolitical landscape and fluctuating trade policies.
While cumulative exports for the FY 2025-26 period faced headwinds—including a temporary 50% US tariff on certain goods and disruptions in West Asia—the recent uptick highlights a successful pivot toward emerging markets and non-traditional trade partners.
The growth was largely driven by a sharp increase in shipments to European and Asian markets, compensating for softened demand in the United States.
Strategic Drivers & Challenges
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Tariff Relief: The sector received a significant boost following the February 2026 trade deal with the U.S., which led to the removal of 25% penalty tariffs previously linked to energy trade issues.
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Logistics Shifts: Exporters have adapted to the closure of traditional Red Sea routes. While the Cape of Good Hope route adds 10–15 days to delivery times and increases freight costs by up to 150%, supply chain efficiencies have kept volume growth steady.
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Policy Support: Government initiatives like the Production Linked Incentive (PLI) scheme for man-made fibers (MMF) and the establishment of PM MITRA Parks are being credited for enhancing the competitiveness of Indian apparel on the global stage.
Industry Outlook
The Apparel Export Promotion Council (AEPC) remains optimistic for the remainder of 2026. The focus is shifting toward leveraging new Free Trade Agreements (FTAs) and expanding the Man-Made Fibre (MMF) segment to align with global fashion trends. However, rising input costs for cotton and polyester remains a key monitorable for profit margins in the coming quarters.