Festivals Drive Textile Sales Growth, but China Imports Worry Indian Retailers

A CMAI survey indicates improving festive demand, with 52% of cloth manufacturers reporting higher sales expectations. However, rising input costs and increased imports of Chinese garments continue to put pressure on the domestic market.

Festive Demand Offers Support to Textile Sales

India’s apparel industry has entered the festive season with a positive outlook, according to the Cloth Manufacturers Association of India (CMAI). The association reported that 52% of its members expect higher sales this year, reflecting improving expectations for the festive retail period.

A recent CMAI survey covering approximately 7,000 members, including major retailers and brands, found that 30% of respondents expect sales performance to exceed last year’s figures by 20% or more.

Former CMAI president and chief mentor of the CMI Rahul Mehta highlighted the importance of the festive period, particularly in the eastern states, where sales traditionally perform well during Durga Puja and Diwali.

He said that sales in southern states during Navratri were sluggish in the previous year and expressed hope that the current festive season would deliver better results.

“Despite the textile inflation of 5%-7%, we think the festival season this year will be better than last year. Raw material prices have started coming down and the global geopolitical situation is not as bad as it was a few months ago. Sales are expected to pick up across the country closer to Diwali,” he said.

Retailers Absorb Rising Input Costs

Despite the improving sales outlook, retailers continue to face pressure from higher operating and input costs. According to the CMAI survey, approximately 54% of respondents said they were absorbing these increases by reducing their profit margins.

Only about 35% of respondents reported passing the higher costs on to consumers through price increases.

The survey also found that strong order bookings by retailers at the CMAI’s National Garment Fairs (NGFs) further reinforced expectations of higher festive-season sales.

However, the association noted that rising input costs remain a concern for retailers, with many choosing to absorb the additional expenses rather than increase selling prices.

Chinese Garment Imports Add to Market Concerns

The growing volume of garment imports from China has emerged as another concern for India’s domestic apparel industry.

According to R. Damodharan, secretary of the South India Hosiery Manufacturers Association, imports of cotton-ready-made garments from China increased during April-August 2025 to 8,508.64 crore, compared with 8,263 crore during the same period last year.

“Several traders are picking orders in China and importing the garments now,” he said.

The increase in imports has raised concerns among domestic manufacturers and retailers about market competition during an important selling period.

Retailers Face Challenges in Passing on Costs

Retailers and distributors are also dealing with uncertainty over whether consumers will accept higher prices amid rising costs.

According to the report, distributors and consumers may not absorb the full increase in prices. “So, the manufacturers (in Tiruppur) are looking at revising the prices after the festival,” he said.

The industry's festive-season performance will therefore depend on consumer demand, the ability of businesses to manage input costs and developments in garment imports.