India holds significant potential to meet global apparel demand, boasting a massive workforce and scale, as per Pawan Gupta, CEO & Founder, Fashinza.
Projected to reach $350 billion by 2030 with 10 per cent annual growth, the country’s textile and apparel sector is already attracting attention from international fashion houses looking to diversify their supply chains, says Gupta. India’s inherent strengths include a broad fiber base, skilled labor, and a fully integrated value chain - from cotton farming through spinning, weaving, dyeing, and garment manufacturing. This comprehensive domestic ecosystem reduces lead times and enhances supply chain control for brands, he adds.
However, the global apparel market is intensely competitive, with investment and sourcing decisions hinging on factors like tariff structures, cost stability, and clear policies. Despite India’s advantages, FDI into its textile sector has remained modest, totaling just $4.56 billion since April 2000. This figure doesn't fully reflect the country's capacity to absorb global capital, as investors prioritize operational certainty, Gupta opines.
High input duties on fabrics, accessories, and machinery imports directly impact the overall cost structure. Even a slight 2-3 per cent cost swing per piece can sway sourcing decisions for mid-to-high-end fashion labels, making countries with zero or low-duty imports more attractive. India’s tax and duty policies also need greater coherence; varying GST slabs for garment categories and slow export credit refund cycles affect working capital and planning.
While increased budget allocation for the textiles ministry and schemes like PLI and ATUFS are positive steps, effective execution is crucial. Global brands on tight retail schedules cannot afford delays in subsidy disbursements or approvals. India also needs substantial capacity expansion in mass-produced items like denim and bottoms, where competitors like Bangladesh hold a significant scale and cost advantage.
Potential trade agreements with the UK, EU, and Canada offer a clear cost advantage. Yet, these must be complemented by rationalized input tariffs to maximize benefits. Furthermore, despite strong production clusters, infrastructure - including consistent power, water, and last-mile connectivity - still lags. To attract long-term capital and realize its ambition as a global apparel hub, India must ensure predictable operational costs, manageable compliance burdens, and synchronized reforms across tariffs, trade facilitation, and production support. Otherwise, it risks losing out to competitors offering simpler business environments.
