India’s Textiles Gain Momentum with FTA Boost and New Markets

Diversification, UK FTA, and rising exports signal fresh growth for India’s textile sector.

India’s textile industry is navigating global volatility with strategic market diversification, technical textile growth, and strong policy support, positioning the sector for long-term expansion.

India’s textile industry is moving into a renewed growth phase despite one of the most challenging global trade environments in recent years. With the US imposing steep tariffs of up to 50% on Indian products—raising the effective duty on textile and apparel imports to 63.9%—the sector is accelerating its search for wider international opportunities. In this backdrop, Rubix Data Sciences has published its latest Industry Insights Report on India’s Textile Sector, highlighting how diversification, rising capital inflows, and strategic government support are guiding the industry through global uncertainty toward sustained expansion.

The report notes that between April and September 2025, India’s textile exports saw year-on-year growth across 111 countries, reflecting a strong push to reduce dependence on the US market. Government-led outreach in 40 priority nations has yielded robust results, with 38 countries recording over 50% growth in imports of Indian textiles. A key driver of this shift is the India–UK FTA signed in July 2025, which allows duty-free access to 99% of India’s textile and apparel shipments. This preferential access is projected to increase exports to the UK by 30%–45% by 2030 and could enable India to double its home textiles market share within three years.

India’s global expansion is backed by solid domestic indicators. Valued at USD 174 billion in FY2025, the textile and apparel market is projected to reach USD 350 billion by FY2031, driven by a 12.4% CAGR. However, the continuation of this growth trajectory will depend heavily on a more predictable trade climate in the US—India’s most significant export destination.

At the same time, the rise of technical textiles is reshaping the sector. This high-growth category is predicted to expand from USD 29 billion in 2024 to USD 123 billion by 2035, supported by demand from healthcare, defence, mobility, and infrastructure. Technical textile exports increased to USD 2.9 billion in FY2025, growing at an 8% CAGR, with Packtech and Indutech together accounting for almost two-thirds of volumes.

Parallelly, India’s consumer fashion market is evolving at speed. Online apparel sales are expected to grow 17% in FY2025 and maintain a 15% CAGR through FY2030, with quick commerce emerging as a new driver. Global brands continue to view India as a major opportunity: 27 international labels entered the market in 2024—twice the previous year’s count.

Innovation-led growth is also evident in entrepreneurship. The number of DPIIT-recognised textile startups increased 3.7x from 2020 to 2024, while apparel-brand startups raised USD 120 million in 2025 (till October), marking a 2.6% year-on-year rise.

To counter global volatility, the government has rolled out several measures in the second half of 2025. These include reversing QCOs on key polyester raw materials—which had pushed costs up by nearly 30%—introducing a ₹450 billion export support scheme, and extending duty-free cotton imports until December 31, 2025. These steps come as domestic cotton output drops sharply from 386 lakh bales in 2014–15 to 294.25 lakh bales in 2024–25, almost doubling import requirements. Uncertainty around BIS contamination standards continues to challenge exporters.

Several structural constraints persist within the sector. A large portion of India’s textile ecosystem remains unorganised, making compliance with global standards on quality, sustainability, and supply-chain traceability more complex for smaller units. Countries like Bangladesh, Vietnam, Cambodia, and Indonesia are intensifying competition through lower labour costs and preferential trade agreements. Additionally, India generates 7.7 million tonnes of textile waste annually, while global buyers are increasingly emphasizing circularity, recycled materials, and low-carbon manufacturing—putting pressure on a sector still transitioning toward sustainable operations.

Mohan Ramaswamy, Co-founder and CEO, Rubix Data Sciences

“India’s textile sector is navigating one of its most complex periods in years,” said Mohan Ramaswamy, Co-founder and CEO, Rubix Data Sciences. “Tariffs, shifting global demand, sustainability pressures, and fierce competition are reshaping the landscape. But the industry is responding with agility, expanding into new markets, investing in technology, moving up the value chain, and embracing circularity. At Rubix, our mission is to equip businesses with the intelligence needed to decode this volatility, manage risk proactively, and make confident decisions in a rapidly changing global economy.”

Rubix Data Sciences concludes that India’s progress as a globally competitive textile hub will hinge on sustained investment in innovation, technology integration, raw material security, and sustainability-led manufacturing. With expanding export diversification, rising investor interest, and rapidly growing digital retail channels, India’s textile industry is poised to power the country’s next chapter of manufacturing-driven growth.