Dear Friends,

As the year 2025 draws to a close, India’s textiles and clothing sector presents a mixed but strategically instructive picture. While export numbers remain under pressure, emerging trends point to a gradual shift away from overdependence on a few mature markets towards a more diversified global footprint. The challenge ahead lies in consolidating gains in emerging destinations while rebuilding competitiveness in USA and Europe through value addition, sustainability, and targeted market engagement.

At the same time, exporters are grappling with steep tariff barriers—most notably the punitive duty imposed by the United States—which has impacted competitiveness, triggered order cancellations, and strained revenues and employment in key export hubs. Slower export growth and selective declines across product segments have intensified the push for market diversification, particularly into smaller high-income markets, alongside faster adoption of sustainable fibres and innovative products to align with evolving global demand.

Meeting with Hon’ble Ministers of Finance, Commerce and Industry

On 16 December, I along with Shri Ravi Sam, Vice Chairman, TEXPROCIL, and Dr. Siddhartha Rajagopal, Executive Director, met the Hon’ble Finance Minister, Smt. Nirmala Sitharaman and highlighted key concerns regarding the relief measures announced by RBI and the Credit Guarantee Scheme for Exporters (CGSE) to mitigate hardships faced by exporters mainly to USA.

We also met the Hon’ble Minister of Commerce and Industry, Shri Piyush Goyal. The discussions focused on export performance, growth opportunities & the global competitiveness of India's textile sector.

The Council remains grateful to the Hon’ble Ministers for giving us a patient hearing and assuring all possible support to the trade and industry in these stressful times.

Signing of Free Trade Agreements

India’s broader FTA strategy— signals a shift toward embedding textiles and apparel more firmly into global value chains. Recent Free Trade Agreements (FTAs) signed by India are assuming growing relevance for the textiles and apparel sector, being viewed not just as trade instruments, but as strategic tools to rewire sourcing, improve market access, and enhance competitiveness.

India–New Zealand FTA

India and New Zealand have concluded negotiations on a Free Trade Agreement aimed at doubling bilateral trade over the next five years. Under the agreement, tariffs on 95% of New Zealand’s exports to India will be eliminated or reduced, with more than half becoming duty-free from day one. In return, all Indian goods will receive duty-free access to New Zealand. The agreement also envisages significant long-term investment commitments, creating new opportunities for Indian exporters.

India–Oman FTA

The signing of the Comprehensive Economic Partnership Agreement (CEPA) with Oman marks another important milestone. The agreement is expected to boost India’s textile exports—particularly cotton garments, handlooms, and technical textiles—by providing tariff-free access, reducing costs, and strengthening entry into the Gulf market. For SMEs and traditional artisans, the CEPA offers an opportunity to expand their international presence, even as competition from Southeast Asian suppliers remains intense.

Trade Data

According to quick estimates released by the Ministry of Commerce & Industry, exports of cotton yarn, fabrics, made-ups, and handloom products grew by 4.10% in November 2025 over the same month last year, indicating a short-term recovery in demand. However, on a cumulative basis, exports of cotton textiles during April–November 2025 declined by (-) 3.26%, reflecting the impact of muted global consumption, trade frictions, and pricing pressures over much of the year.

For the period April–November 2025, textile exports declined by 2.27%, while apparel exports increased by 2.28%, leading to an overall marginal contraction of 0.35% in total textiles and apparel exports. This near-flat performance suggests that while the sector has not yet returned to a strong growth trajectory, it has largely absorbed the initial shocks of weak global demand and is showing signs of consolidation. This transition phase also marks the challenge for the Indian T&A sector to sustain trade momentum through enhanced competitiveness, market diversification, and alignment with evolving global demand patterns in 2026.

Trade Promotion

As part of export promotion initiatives for the current fiscal year, the Council participated in the Egypt Fabric and Yarn Show – EgyStitch and Tex, held from 4–7 December 2025 in Cairo. Egypt being a key player in apparel production and exports, this is the go-to show that serves the needs of garment and home textile manufacturers seeking raw materials such as yarns, fibres, fabrics, narrow weaves, linings, and the latest in textile and garment machinery and technology. The current edition of show offered a valuable platform for engagement with international buyers and industry stakeholders, particularly from the African region. It also signified an important step taken by the Council to diversify exports to new markets.

Kasturi Cotton Bharat

Under the national branding initiative Kasturi Cotton Bharat, the Council continues to strengthen India’s premium cotton identity through focused outreach and awareness programmes in major Cotton growing areas and clusters.

Detailed accounts of these initiatives have been featured in the Newsletter.

I earnestly encourage the user industry to actively embrace and promote the Kasturi Cotton brand across the value chain, thereby enhancing the global brand equity of India’s cotton textiles.

Way Forward

Friends, as we step into year 2026, we look forward to make new beginnings and build on our competitive strengths. We also need to realise that the world trading order is undergoing seismic shifts with countries weaponizing tariffs and seeking to protect domestic markets from rising imports.

Given these emerging realities, we need to  focus on building our relative competitiveness by laying emphasis on raising productivity, improving fibre quality, and accelerating technology upgradation and machinery modernisation.

Greater emphasis on meeting sustainability standards well, supported by eco-friendly production methods will also be essential to meet evolving international benchmarks.

At the same time, sustained investment in skilled manpower, design capability, and value-added segments—including high-end apparel and home textiles will be key to improving margins and long-term resilience.

Looking ahead to 2026, we also fervently hope and pray that wiser counsel prevails on all sides and the unjustified punitive tariffs imposed on Indian exports by USA are rescinded without any further delay.

Wishing all our Members and Patrons a Happy and Prosperous New Year 2026!

:: TEXPROCIL ::