Rupee Depreciation Supports Textile Export Competitiveness Despite FY26 Shipment Decline

Textiles and apparel, among India’s leading merchandise export segments, reported exports worth $35.80 billion in FY26, compared with $36.61 billion in FY25.

According to Union Commerce Ministry data, textile and apparel exports registered a 1.78% CAGR between FY2014-2015 ($29.47 billion) and FY26. Exports reached a peak of $37.54 billion in 2021-2022 before declining by 2% in the last financial year.

Data compiled by the Southern India Mills Association (SIMA) from government statistics showed exports at $37 billion in FY15. The figure crossed $40 billion in FY22, before falling to $36.44 billion in FY25 and ending FY26 at $35.78 billion.

Industry sources noted that multiple factors have influenced export performance over the past 12 years, particularly during the last two years.

Exchange Rate Impact

“We need to take into consideration the exchange rate in 2024-2025 and 2025-2026. The rupee was at 86.60 on April 2, 2025 and ended 2025-2026 at 94.83 on March 31 this year,” said an export promotion council official, who did not want to be identified.

“When the U.S. orders fell in 2025-2026, demand from China, Bangladesh and Sri Lanka improved. There was a regional balance to some extent. In terms of volume, exports may have grown marginally between 2024-2025 and 2025-2026 though there were severe supply chain disruptions,” said Siddhartha Rajagopal, executive director of the Cotton Textiles Export Promotion Council.

“Though exports to Africa shot up for a few months last fiscal, it was one of the most uncertain periods for the textile and garment exporters,” said K. Sakthivel, chairman of the Powerloom Development Export Promotion Council. “We are in Japan now and talking to buyers. We will get a better picture in the coming days.”

Challenges in the U.S. Market

Chairman of the Apparel Export Promotion Council (AEPC) A. Sakthivel said that although the U.S. remained among the top three export markets for India, exporters faced several challenges during 2025-2026 due to tariff-related concerns.

“Buyers did not vanish totally. Some of them reduced the prices, some of them shifted a part of the orders, and some waited. So, there were still orders going to the U.S. last year. Now, the suppliers are expecting to get tariff refunds at least to some extent,” he said.

AEPC plans to organise buyer-seller meets from September in EU countries to tap opportunities that may arise from the implementation of the Free Trade Agreement, A. Sakthivel added.

Long-Term Export Trends

Industry officials pointed out that when the rupee traded at about 65 per dollar in FY15, annual textile and garment exports were nearly $30 billion, based on Commerce Ministry statistics. With the Indian rupee at almost 95 in 2025-2026, exports are at $35 billion.

They noted that export growth has remained limited, while apparel shipments have been significantly affected, particularly in recent years. According to industry representatives, the impact has been more pronounced among MSME exporters.

Volume Concerns Remain

Some industry participants believe export volumes between 2014-2015 and 2025-2026 may have declined by nearly one-third.

Indian Chamber of Commerce, National Export Committee on Textiles head Sanjay K. Jain said that apparel exports contraction in May (12.98%) was partly due to slower demand from West Asia and also because of the higher base of 2024-2025, when exporters rushed shipments to meet tariff-related deadlines.

The industry is expecting market conditions to improve in the coming weeks with the implementation of FTAs and the end of the U.S.-Iran war.