India’s textile and apparel industry needs a strategic shift towards man-made fibre (MMF)-based products, larger-scale manufacturing, stronger global market access and greater investment in technology and innovation if the country is to achieve its US $100 billion textile export target by FY30, according to a new report by NITI Aayog, prepared in collaboration with CRISIL Intelligence.
Textiles is among the 12 manufacturing sectors identified by NITI Aayog as having the potential to help India emerge as a global manufacturing leader.
The report said India’s textile and apparel industry contributes around 2% to national GDP, 11% to manufacturing GVA and 9% of merchandise exports. It provides livelihoods to more than 45 million people, making it the country’s second-largest employment generator after agriculture.
In FY25, India exported US $37.7 billion worth of textile products and accounted for 4.1% of global textile and apparel exports, ranking sixth globally. Nearly 80% of the sector’s capacity is spread across MSME clusters.
The global textile industry is expected to reach around US $1.78-1.83 trillion by 2027, growing at a CAGR of 2.5-3.5% between 2023 and 2027. Growth is expected to be supported by fast fashion, e-commerce, urbanisation and rising disposable incomes.
The report noted that while natural fibres accounted for about 44% of the global textile market by value between 2018 and 2023, polyester held a 29% share and nylon 20%.
The growing demand for durable, wrinkle-resistant, quick-drying and performance-oriented products is expected to support MMF consumption.
Global textile trade reached approximately US$901 billion in 2023, with apparel accounting for the largest share, followed by fabrics and home textiles.
Asia-Pacific remains the largest supplier of downstream textile products, led by China, India, Bangladesh and Vietnam, while the US and Europe remain major consumption markets.
India has significant strengths across the textile value chain, covering cotton, MMF, yarn, fabric, garments, home textiles and technical textiles. The country accounted for around 22% of global cotton production in the 2023/24 marketing year and remains the world’s largest exporter of cotton yarn, with a 29% share of global cotton yarn exports in CY2023.
However, NITI Aayog said India’s continued concentration on cotton is becoming a constraint as global demand increasingly shifts towards synthetic fibres.
Cotton yarn production declined at a 5% annual rate from 3,962 million kg in FY20 to 3,438 million kg in FY23, while man-made filament yarn and blended/non-cotton yarn production increased to 3,650 million kg.
The report estimates that the domestic RMG sector could grow at around 5% CAGR between FY23 and FY30, while exports could grow at around 6%. The domestic MMF market, valued at approximately US$6.8 billion, is projected to grow at 6-7% CAGR during the same period.
MMF feedstock remains a major competitiveness challenge, India’s MMF industry is largely driven by polyester and viscose, which together account for around 97% of total fibre consumption. Polyester production depends on PTA and MEG, but India currently meets only about 75% of PTA demand and 65% of MEG demand through domestic production, with the balance imported.
The report said import dependence, crude oil price volatility, currency fluctuations and limited domestic feedstock capacity affect the cost competitiveness of Indian polyester producers.
The financial performance of Indian MMF companies is also weaker than international peers because of higher raw-material costs, low capacity utilisation, limited economies of scale and insufficient technology upgrades.
NITI Aayog has therefore recommended lowering GST on PTA and MEG to address the inverted duty structure. While GST on polyester fibre, yarn and fabric was revised to 5% in September 2025, PTA and MEG continue to attract 18% GST, resulting in working-capital blockage for yarn and filament manufacturers.
The report has also suggested reducing or removing the 5% customs duty on MEG, given that around 35% of India’s MEG requirement is currently met through imports.
India is expected to add around 5.5 million tonnes per annum of PTA capacity over the next two to three years, potentially taking the country towards self-sufficiency.