India’s textile industry is entering a new phase of expansion despite one of its most challenging global trade environments in recent years. With US tariff rates on Indian textile and apparel imports reaching an effective 63.9%, the sector has accelerated efforts to diversify beyond its largest export market.
A new Industry Insights Report by Rubix Data Sciences highlights that between April and September 2025, India recorded year-on-year export growth across 111 countries. Government engagement in 40 priority markets has supported this shift, with 38 countries posting over 50% growth in imports of Indian textiles.
The India-UK Free Trade Agreement, signed in July 2025, has emerged as a major driver of diversification. The FTA offers duty-free access to 99% of India’s textile and apparel exports, with expectations of a 30–45% rise in export volumes to the UK by 2030. The agreement may also enable India to double its share in the UK home textiles market within three years.
Domestically, the sector remains on a growth trajectory. Valued at USD 174 billion in FY2025, India’s textile and apparel industry is projected to reach USD 350 billion by FY2031 at a CAGR of 12.4%. The report notes, however, that sustained momentum will depend largely on stability in global trade conditions.
Technical textiles continue to be the fastest-growing segment. The market is expected to expand from USD 29 billion in 2024 to USD 123 billion by 2035, driven by applications in healthcare, mobility, defence, and infrastructure. In FY2025, technical textile exports reached USD 2.9 billion, with Packtech and Indutech making up almost two-thirds of export volumes.
India’s domestic fashion consumption is also rising. Online apparel sales are projected to grow 17% in FY2025 and maintain a 15% CAGR through FY2030. Quick commerce has begun entering the fashion space, and India remains a strong market for global brands. Twenty-seven international retailers entered in 2024, double the previous year’s figure.
Startup activity has strengthened as well. DPIIT-recognised textile startups grew 3.7 times between 2020 and 2024, and apparel-brand startups raised USD 120 million in 2025 (up to October), marking 2.6% year-on-year growth.
To counter volatility, the government has announced several measures for the latter half of 2025. These include revoking QCOs on key polyester raw materials—previously raising costs by around 30%—a ₹450 billion export support package, and extending duty-free cotton imports until 31 December 2025. The interventions follow a sharp decline in domestic cotton production, which fell from 386 lakh bales in 2014–15 to 294.25 lakh bales in 2024–25. Cotton imports have nearly doubled in the same period, while clarity on BIS contamination standards remains awaited.
The report also points to structural challenges. Much of the textile value chain remains unorganised, limiting smaller units’ ability to meet global quality and sustainability requirements. Competition from Bangladesh, Vietnam, Cambodia, and Indonesia continues to intensify due to lower labour costs and favourable trade agreements. Sustainability demands are rising as well, with India producing 7.7 million tonnes of textile waste annually and global buyers pushing for circularity and recycled inputs.
Mohan Ramaswamy, Co-founder and CEO, Rubix Data Sciences
According to Rubix Data Sciences Co-founder and CEO Mohan Ramaswamy, the sector is adapting with greater market diversification, technological investment, and a shift toward higher-value production. He noted that businesses must navigate changing sustainability expectations and global demand patterns with proactive risk management.
The report concludes that India’s long-term competitiveness will depend on innovation, raw material security, sustainability compliance, and consistent policy support. With expanding global reach, rising investor interest, and growing digital retail channels, the textile sector is positioned to contribute significantly to the country’s next phase of manufacturing-led growth.