India’s apparel sector reached a historic milestone in FY25-26, with exports to the European Union (EU) rising to a record US$ 4.66 billion. This performance signals a decisive transition in India’s manufacturing profile, moving from commodity-heavy trade toward higher-value, innovation-driven supply chains. Following the conclusion of the India-EU FTA negotiations in January 2026, domestic manufacturers have gained a more competitive footing, successfully narrowing the cost and logistics gap against traditional regional rivals. This policy progress has been instrumental in securing India’s position as a preferred sourcing hub for European retailers, who are increasingly favoring trade agreements that promise long-term tariff relief and regulatory predictability.

Operational resilience in a shifting global landscape

The growth trajectory is heavily supported by the industry's widespread adoption of the ‘China+1’ diversification strategy, as global brands seek stable, compliant, and transparent manufacturing partners. Indian firms are rapidly integrating digital trade facilitation and advanced logistics to align with the stringent environmental mandates of the EU market, including the Carbon Border Adjustment Mechanism (CBAM). India’s as a primary sourcing destination is now driven by their ability to offer end-to-end traceability and ethical production at scale, states a spokesperson for the Ministry of Textiles. By prioritizing ready-made garments and value-added textiles, manufacturers are successfully capturing a larger share of the European market, which remains the leading destination for India’s diversified export basket.

Targeting US$350 billion textile exports by 2030

The Indian textile industry spans an integrated value chain from fiber to garmenting. Key products include cotton-based apparel, man-made fibers, and technical textiles. The sector is scaling operations to meet a national export goal of US$ 350 billion by 2030, bolstered by government incentives like the RoSCTL and RoDTEP programs.