The brokerage stated that India’s share in global apparel trade has remained largely stagnant at 3-4 per cent over the past 15 years despite the country being one of the world’s largest textile producers. However, it believes the sector is now approaching an inflection point that could help it regain competitiveness against major exporting nations such as China, Bangladesh and Vietnam.
“India has traditionally been a textile powerhouse but lost market share in the global apparel trade, which has remained stagnant at 3-4 per cent over the past 15 years. However, we believe India is at an inflection point to regain its lost glory,” Emkay Research said in its report.
India’s textile and apparel sector remains one of the country’s largest sources of employment and export earnings, but it has struggled to expand its global footprint over the past decade and a half. According to Emkay Research, a combination of policy measures and structural changes is beginning to improve the industry’s outlook.
The report highlighted the government’s efforts to strengthen the domestic man-made fibre ecosystem through Production Linked Incentive schemes, PM MITRA textile parks and investments in petrochemical capacity. These initiatives are expected to improve supply chain integration and reduce dependence on imported raw materials.
The brokerage also identified ongoing and proposed free trade agreements with key markets, including the European Union, the United Kingdom and Australia, as potential game changers for the sector.
Trade agreements are expected to play a decisive role in shaping the industry’s next phase of growth. According to the report, Indian textile exporters stand to gain significantly if import duties on Indian products are reduced or eliminated in major developed markets.
The proposed free trade agreements with the European Union and the United Kingdom are particularly important because they could help Indian exporters compete more effectively with rivals such as Bangladesh and Vietnam, which currently enjoy preferential market access in several regions.
Emkay Research said lower-duty or duty-free access could improve pricing competitiveness and help Indian manufacturers capture a larger share of global apparel and textile exports over the medium term.
The report also highlighted changing global trade dynamics as a significant opportunity for Indian exporters. According to Emkay Research, Indian textile exporters currently enjoy a tariff advantage of around 7-8 per cent in the United States market compared with Chinese suppliers.
This advantage comes as global brands and retailers increasingly seek to diversify sourcing away from China amid geopolitical tensions, supply chain disruptions and evolving trade policies. Emkay said the tariff differential, combined with Goods and Services Tax reforms, favourable import duties and stronger corporate balance sheets, could help Indian exporters secure a larger share of international orders.
While exports remain a key growth driver, the report noted that India’s large and expanding domestic apparel market continues to provide stability for the sector. The country’s consumer demand has helped textile and apparel manufacturers navigate global disruptions, including the Covid-19 pandemic, the Russia-Ukraine conflict and volatility in international trade conditions.
“Backed by a robust domestic market, favourable United States Dollar-Indian Rupee exchange rates and strong balance sheets, we believe domestic players would be able to absorb future shocks too,” the report said.
According to Emkay, the combination of export opportunities and domestic consumption could provide a more balanced and sustainable growth trajectory for the industry.
Beyond traditional apparel and garments, the report identified technical textiles as one of the most promising segments within the broader textile industry. Technical textiles include specialised products used across sectors such as defence, healthcare, automotive, infrastructure, packaging and industrial manufacturing.
According to Emkay Research, the domestic technical textiles market recorded annual growth of around 7-8 per cent between Financial Year 2020 and Financial Year 2026 projections. The brokerage expects growth to accelerate into double digits over the next five years.
The anticipated expansion is likely to be supported by government incentives, lower Goods and Services Tax rates on man-made fibre products, rising industrial demand and improved export competitiveness through trade agreements.
The report stated that a revival in the textile sector would have implications beyond export growth. A stronger textile and apparel industry could support employment generation, increase manufacturing output and strengthen India’s position in global supply chains at a time when multinational companies are seeking to diversify sourcing bases.
With policy support, improving trade access and favourable global trends, Emkay Research believes India may finally be in a position to reverse years of stagnation and reclaim a larger role in the global textile and apparel market. However, the brokerage noted that the pace of infrastructure development, execution of policy initiatives and timely conclusion of trade agreements will be critical in determining whether the sector can fully capitalise on emerging opportunities.
For now, the report said, the long-term outlook for India’s textile industry appears considerably brighter than it has in years, signalling the possibility of a transformative phase for one of the country’s most important manufacturing sectors.
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