Despite grappling with a steep 50% US tariff for over five months in the previous fiscal year, it goes to the credit of India’s textiles and apparel exporters that the dip in exports was contained at 2.21% in the financial year 2025-26 compared to FY 2024-25. This underscores the resilience and adaptability of an MSME-heavy sector operating under narrow margins in the face of severe challenges, considering that the US is the single-largest market for India’s textile and apparel exporters.

Simultaneously, the data for FY26 also highlights that the Manmade Fibre (MMF) segment is aligning better with global consumption patterns. However, traditional segments like Cotton textiles are undergoing stress, reflecting challenges faced in demand and on costs. The sharp increase in cotton imports at 54.9% signals domestic supply constraints and cost pressures, highlighting the urgent need to remove the import duty on cotton to improve the global competitiveness of India’s Cotton Textiles segment.

With the removal of the punitive US tariff and new opportunities emerging through free trade agreements (FTAs), the textile and apparel industry is optimistic about its prospects in the current fiscal year. The hopes are lifted by the growing likelihood of an early easing of turbulence in West Asia.