India’s textile and apparel shipments to the United States witnessed a significant downturn in the opening months of 2026, with export values to the nation’s largest trade partner sliding by 18.2 per cent in January and 28.7 per cent in February. Total shipments for the two-month period fell to $1.34 billion, down from $1.69 billion a year earlier. This contraction is primarily attributed to a broader slowdown in US discretionary spending, where consumer confidence has been tempered by persistent inflation. While industrial bodies like the Confederation of Indian Textile Industry (CITI) highlight that India’s decline is less severe than China’s 50 per cent slump, the data underscores a volatile transition period for Indian manufacturers who are struggling to maintain margins against rising input costs and shipping disruptions.
Structural shifts and comparative competitiveness
The sector currently faces a complex competitive landscape as Vietnam continues to outperform regional peers, recording a 5 per cent Y-o-Y growth in US exports during the same period. Vietnamese exporters benefit from a robust network of over 16 Free Trade Agreements (FTAs) and a high-tech manufacturing base that has successfully offset rising labor wages. In contrast, Indian exporters are navigating the reinstatement of an 11 per cent import duty on raw cotton as of January 1, 2026, which has inflated production costs by an estimated 4-6 per cent. No amount of duty advantage can salvage a season if the demand at the top of the supply chain compresses, stated a senior trade analyst, referencing the missed peak-season orders that have hindered an immediate recovery despite recent US tariff adjustments.
Future outlook and policy interventions
To arrest this slide, the Indian government has committed to an Export Promotion Mission with a Rs 25,060 crore outlay through 2031, focusing on interest subventions and collateral guarantees for MSMEs. Strategic opportunities are emerging in the Man-Made Fiber (MMF) and technical textiles segments, which showed a marginal 1.01 per cent growth in January, defying the general downward trend. The industry is also pivoting toward ‘China Plus One’ strategies, with Odisha emerging as a new high-tech hub to leverage logistical advantages. As the domestic market is projected to reach $115 billion by late 2026, the sector’s long-term resilience will depend on accelerating value addition and securing duty-free access to raw materials to compete with the structural cost advantages held by Bangladesh and Vietnam.
Sustainable manufacturing leadership
Epic Group is a premier Hong Kong-based manufacturer specializing in high-quality woven tops and denim for global retail giants. With a historical shift from trading to large-scale production in 2005, the group operates across Bangladesh, Vietnam, and Jordan. Its 2026 expansion into Odisha, India, via a Rs 220 crore net-zero facility, targets a $1 billion global revenue milestone.
The group remains a key player in the US and EU markets, focusing on decarbonized supply chains and technical apparel innovation.
