2025 in Perspective: A Stronger, Cleaner, Smarter Future for Textiles

Mr Rajeev Gupta

JMD,

RSWM Ltd

The year 2025 reminded the textile and apparel sector that resilience now matters more than pace. The global market grew by nearly 4% and reached approximately $ 2.3 trillion, yet the real story was the shift in how the industry thinks. The demand for sustainable and functional clothing strengthened the recovery, while the Asia Pacific remained at the centre of growth, driven by strong consumption and supportive policy environments. Even with this progress, volatility shaped the year. Brands pushed harder for recycled inputs and transparent chains. Consumers preferred certified and ethical products. The secondhand and rental economy widened its base. Companies had to plan faster, reduce waste and maintain responsible sourcing at the same time.

India moved through this phase with caution but also clarity. Exports to the United States slowed after tariff changes, which created short-term pressure. The sector used the moment to rethink its market mix, diversify products and deepen engagement with regions showing stronger potential. Despite challenges, the industry’s scale stayed solid. It continued to contribute meaningfully to GDP, industrial output, national exports and employment while closing FY2025 with exports near 37 billion dollars.

This transition has been less about setbacks and more about learning where the next phase of strength will come from.

Market Realignment in 2025

The global market moved through a cautious but constructive year. Growth came from functional clothing, rising athleisure use and increasing preference for comfort driven apparel. Organised brands within sportswear and athleisure recorded steady gains as consumers continued to prioritise performance and longevity. This segment maintained its momentum even when traditional categories moved at a slower pace.

Volatile raw material conditions shaped strategy across the value chain. Cotton prices fluctuated due to weather-linked disruptions and uneven global availability. MMF prices stayed sensitive to shifts in energy markets and demand from high-performance segments. Recycled materials gained stronger visibility as brands focused on reducing emissions and strengthening traceability. These changes pushed manufacturers to build better forecasting systems and reduce dependence on single-source supply channels.

Consumer preferences evolved beyond simple affordability. They leaned toward brands that offered clarity in sourcing, lower climate impact and responsible production. This economy, which was once seen as a niche, became a meaningful part of urban consumption. Fast-changing demand cycles encouraged companies to shorten production runs and adopt agile planning tools. The year marked a shift from linear production thinking to a more responsive and knowledge-driven approach.

Sustainability and Circularity Gain Deeper Ground

Sustainability moved from intent to action. Exporters adopted cleaner processes and invested in resource-efficient technologies. Water saving methods, energy-efficient machinery, and chemical management systems became part of mainstream planning. Many companies strengthened traceability frameworks to meet global expectations.

Circularity gained real traction. Manufacturers increased their use of recycled blends in home textiles and apparel. More firms explored partnerships with recycling units to close material loops. Large players aligned their operations with global sustainability goals for 2025. Smaller players faced financial constraints, yet the direction remained consistent across the value chain. The sector understood that future competitiveness will rely on how quickly it adopts low-carbon materials and efficient manufacturing systems.

Trade Movements and Policy Developments

Global trade conditions shaped much of the year’s decision-making. India’s exports to the United States came under pressure due to tariff changes that reduced product-level competitiveness. The impact was visible across apparel, home textiles, and man-made fibre-linked products. The decline created short-term concerns for employment hubs and working capital cycles.

Despite this, the sector used the period to strengthen its long-term positioning. Firms diversified markets, expanded into regions with stronger demand stability, and reassessed product profiles to meet global buyers seeking variety and traceability. The UK-India FTA moved forward and created optimism regarding smoother market access and deeper manufacturing collaboration. Several global buyers recalibrated sourcing to reduce overdependence on a few geographies. This created new opportunities for India, Vietnam, Bangladesh and other Asian manufacturers to strengthen their partnerships.

Compliance expectations rose across all major markets. Environmental and social benchmarks became more stringent. Companies had to prepare for audit ready operations, increasing investment in documentation and chain visibility. Logistics conditions remained uncertain due to shifting freight routes and geopolitical concerns. Firms had to balance these costs while protecting delivery timelines and quality consistency.

Demand Patterns Across Domestic and Export Markets

The domestic market maintained stability, supported by rising urban consumption and online retail growth. Consumers invested in premium quality clothing and home improvement categories. Functional and comfort wear continued to dominate choices in metropolitan regions. Technical textiles saw consistent demand due to needs in automotive, healthcare, construction, and agriculture.

Export markets moved at uneven speeds. Athleisure and performance wear maintained clear demand. Home textiles showed selective recovery as buyers prioritised certified low-impact products. Technical textiles grew in relevance due to global infrastructure spending and the need for high-performance materials. Across categories, the dominance of sustainability, durability and comfort shaped sourcing decisions more than pure price-based comparisons.

Managing Cost Pressures and Operational Transitions

Cost pressures were a reality for most manufacturers. Energy transitions increased operational expenses for firms adopting renewable sources. Logistics expenses fluctuated throughout the year. Compliance-related investments rose due to the push for transparent and traceable supply chains. Despite these challenges, companies continued to modernise production through automation and digital tools. Spinning, weaving and garmenting units introduced systems that improved consistency, reduced wastage and enhanced machine efficiency. The year proved that competitiveness now depends on technology, capability and responsible operations rather than cost arbitrage alone.

Early Outlook for 2026

The first half of 2026 is expected to offer more balance. Input costs are likely to stabilise as cotton and MMF markets settle into predictable cycles unless weather patterns shift drastically. This stability will support better planning across spinning, weaving, processing and garmenting.

Global demand may improve slightly with variations across regions. Essentials, comfort wear, premium categories, and performance-driven products are expected to maintain stability. Nearshoring and friendshoring will continue as global brands aim for diversified sourcing. These shifts will encourage manufacturing countries to improve speed, reliability and compliance readiness.

Digitalisation will gather stronger momentum. Predictive forecasting, automated planning, plant-level sensors, digital twins, and AI-based monitoring will become part of mainstream operations. Companies investing in these systems will see clear improvements in productivity and delivery assurance.

Low-carbon materials will gain priority across brands. Bio-based fibres, recycled blends, and water-saving technologies will influence partnerships and export competitiveness. Markets with strict carbon border norms will create new standards that the sector must prepare for with urgency and focus.

The Broader Direction Ahead

The sector stands at a decisive moment. Its future strength will depend on the depth of its resilience. This includes diversified raw material sources, flexible production capacities, skilled labour and agile supply partnerships. Companies that embed sustainability in core operations will secure stronger global relationships. Digital adoption will determine efficiency. Innovation in materials and design will shape new product categories.

Investment priorities will shift toward integrated value chains, capacity upgrades, circularity infrastructure and technology-driven operations. Firms will explore collaborations that help them share resources, manage compliance and expand markets without excessive capital strain.

The year 2025 gave the industry clarity and direction. It demonstrated that volatility will remain part of global manufacturing. Yet it also showed that transformation is underway. With stable input conditions, thoughtful investments and stronger supply partnerships, 2026 can set the stage for a more competitive and future-ready textile ecosystem.