India’s Textile Industry Nears USD 190 Billion in FY2026, Targets USD 350 Billion by 2030: Rubix Report

Textile exports grew 10.3% in rupee terms during April–August 2026 following a 2.7% decline in FY2026, while the US remained India’s largest export market amid tariff uncertainty.

India’s textile industry expanded to nearly USD 190 billion in FY2026 and is targeting USD 350 billion by 2030, supported by domestic demand, manufacturing investment and export opportunities, according to the October 2026 edition of Rubix Industry Insights: Textiles Update by Rubix Data Sciences.

The report, an update to the edition released in November 2025, comes as the Indian government considers a INR 400 billion, five-year Textile Expansion and Employment (TEEM) Scheme. The proposed scheme aims to modernise traditional textile clusters through machinery upgrades, advanced technology and common testing facilities to improve productivity, global competitiveness and exports.

Textile and Apparel Trade in FY2026

India’s textile and apparel exports declined by 2.7% to USD 35.8 billion in FY2026, while imports increased by 17.1% to USD 9.6 billion. Despite the decline in exports, India remained a substantial net exporter, with export value nearly 3.7 times that of imports.

Readymade Garments (RMG) accounted for 44% of India’s textile exports in FY2026. Man-made fibre (MMF) textiles increased their share from 14% in FY2025 to 15% in FY2026.

The United States remained the largest destination for India’s textile and apparel exports, accounting for 31% of the total in FY2026. The European Union contributed nearly 16%.

US Tariff Uncertainty Drives Export Diversification

Trade uncertainty continues to influence India’s textile export outlook. In February 2026, the US–India trade framework announced a reduction in the reciprocal tariff rate to 18%, compared with 20% for Vietnam and 30% for China.

In July 2026, the US introduced a separate additional 10% duty under Section 301 measures concerning forced-labour import enforcement. As of October 2026, trade negotiations appeared to have stalled.

Exporters have increasingly looked to diversify their markets. Exports from India’s textile, apparel and handicraft sector to the US declined by approximately 7% in FY2026, while exports to major European markets increased by 9% year-on-year.

Raymond Lifestyle plans to reduce the US share of its exports from 65% to 55%–60% over two years. Kitex Garments plans to lower the US share of its business from nearly 100% to 30%–35% over the next two to three years.

Textile Exports Rebound in April–August 2026

India’s textile exports, including handicrafts, recorded a year-on-year increase of 10.3% during April–August 2026. Cotton textile exports grew by 18.0%, while MMF textile exports increased by 13.6%.

The recovery follows the decline recorded in FY2026 and comes amid continuing trade uncertainty and pressure on production costs.

Cotton Yarn Prices Put Pressure on Margins

Cotton yarn prices rose by approximately 60%, reaching INR 400 per kg in September 2026 from INR 250 per kg at the beginning of the year. The increase has put pressure on margins across the textile value chain.

Domestic cotton production declined to 290.91 lakh bales in the 2025–26 season, compared with 352.48 lakh bales in 2020–21.

To ease input costs, the government temporarily exempted cotton imports from the 11% import duty from 1 June to 31 October 2026. The textile industry is seeking a six-month extension beyond 31 October 2026. Domestic cotton farmers, however, have expressed concerns that continued duty-free imports could depress prices during the new harvest season.

Cotton textiles account for around 30% of India’s textile exports and grew by 18.0% between April and August 2026.

In May 2026, the Union Cabinet approved an outlay of INR 56.59 billion for the Mission for Cotton Productivity, covering 2026–27 to 2030–31. The initiative aims to improve cotton yields and quality and strengthen India’s self-sufficiency in cotton.

MMF Textiles Gain Export Share Amid Import Dependence

Although India is widely associated with cotton production, MMF textiles are gaining a larger share of the export market. Their share of textile exports increased from 14% in FY2025 to 15% in FY2026, while export value grew by 13.6% during April–August 2026.

In October 2025, the government revised the Production Linked Incentive (PLI) Scheme for MMF apparel, MMF fabrics and technical textiles. The revisions added 17 MMF product codes, halved the minimum investment thresholds for new applicants and reduced the incremental turnover requirement from 25% to 10%.

In April 2026, 52 new applications were approved under Round III of the PLI Scheme for Textiles, with committed investments of INR 67.08 billion.

However, dependence on synthetic textile imports remains significant. Man-made textiles accounted for 41% of India’s textile imports in FY2026, up from 39% in FY2025, highlighting the gap between policy ambitions and domestic supply.

Textile Parks and Manufacturing Investments

The government has approved seven PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks. The first park, located in Warangal, Telangana, was inaugurated in May 2026.

Each park is expected to generate approximately 3 lakh jobs once fully developed, comprising 1 lakh direct and 2 lakh indirect employment opportunities.

Investment interest totalling INR 685.9 billion had been received by PM MITRA States as of 11 August 2026.

Private-sector investment has also continued. Grasim Industries announced an investment of INR 30.94 billion for Phase II Lyocell capacity in June 2026, while Vardhman Textiles announced a broader INR 36.6 billion capital expenditure programme in July 2026.

Rubix Highlights the Need for Cost Competitiveness

Commenting on the findings, Tushar Bhaskar, President, Rubix Data Sciences, said, “India’s textile industry has shown resilience, with exports growing 10.3% in April–August 2026 after a 2.7% decline in Dollar terms in FY2026. At the same time, trade uncertainity in the US market a risen of approximately 60% in cotton yarn prices, and freight disruptions are adding to the pressure. This reinforces the importance of diversifying India’s export destinations and improving cost competitiveness.”