Driven by major global trade dynamics and a concerted effort by multinational retailers to diversify their sourcing away from China, India’s apparel export industry is undergoing a significant strategic shift. As per a recent report by Antique Research, the country’s strong manufacturing base, competitive labor costs and rapidly expanding product capabilities make it a key beneficiary of this transition.

While competitors like Bangladesh and Vietnam have historically dominated global apparel exports, India is quickly gaining ground. This shift is fueled by geopolitical realignments, trade tensions, and the rising global emphasis on building more sustainable and diversified supply chains—the so-called ‘China+1’ strategy.

This structural change is opening new doors for Indian garment manufacturers, supported by several domestic improvements, notes the report. These include an improving infrastructure and supply chain efficiency, incentives like the Production-Linked Incentive (PLI) schemes and enhanced adherence to international standards.

The United States and European Union remain India’s largest apparel markets, showing renewed interest in key segments like cotton garments, knitwear, and value-added fashion apparel.

Despite the positive momentum, the report warns of substantial challenges, primarily centered on market access. For instance, India lacks Free Trade Agreements (FTAs) with key markets, resulting in high import tariffs. For instance, Indian apparel exports to the EU face average tariffs of 9–12 per cent, while competitors like Bangladesh enjoy zero-duty access under the EU's Everything But Arms (EBA) initiative.

These tariff disadvantages are eroding India’s price competitiveness, making exports -especially in ready-made garments (RMG) and home textiles - less viable.

The industry is optimistic that a significant 25 per cent tariff could be lifted by the end of the fiscal year.

Beyond tariffs, Indian producers still grapple with hurdles like compliance costs, volatile cotton prices, and a fragmented manufacturing ecosystem. However, the forthcoming FTAs with the UK and EU are critical to leveling the playing field, the report notes.

If tariff barriers are successfully addressed and domestic supply chain reforms continue, India is well-positioned to significantly increase its market share of the $500-billion global apparel export market over the next decade.

India’s upcoming Diwali festival is expected to register record-breaking retail sales this year, marking the strongest festive season performance in a decade. The textiles and garments sector is forecast to be one of the main beneficiaries, even as potential challenges from the global market loom for exporters.

According to estimates from the Confederation of All India Traders (CAIT), Diwali trade could surpass Rs 4.75 lakh crore ($53.50 billion). Recent reductions in GST and Prime Minister Narendra Modi’s ‘Vocal for Local’ (Swadeshi) campaign are expected to give a significant boost to domestic traders, opines Pravin Khandelwal, Secretary, CAIT

Khandelwal states, this year's Diwali is likely to ‘illuminate homes and brighten the fortunes of small traders, manufacturers, artisans, and service providers across India.’

Markets across the country, from traditional bazaars to large shopping malls, are projected to see strong consumer turnout. Textiles and garments are expected to account for roughly 12 per cent of total festive expenditure, driven by a growing preference for domestically and locally made products. This momentum reflects the success of the Atmanirbhar Bharat (self-reliant India) initiative, with locally produced Swadeshi textiles expected to dominate sales.

According to industry analysts, the textile sector faces a mixed outlook. While robust domestic demand is certainly expected to lift sales, potential US tariffs on textile imports could put a drag on export performance. In response, manufacturers in major textile hubs such as Surat, Ludhiana, and Tiruppur are reportedly ramping up production to meet the huge festive demand at home and offset any possible international headwinds.

Emphasizing on the festival’s wider importance, Khandelwal states, Diwali is not just about lighting lamps but about powering the entire economic ecosystem of Bharat.

Overall, the Diwali season is set to highlight the resilience of India’s domestic retail market. Strong consumer sentiment and patriotic purchasing are expected to sustain growth, reinforcing the growing importance of local demand in supporting the textile and garment industry against international pressures.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) plans to develop an AI-enabled Environmental, Social, and Governance (ESG) compliance framework called the 'Digital Factory Passport (DFP).' This initiative aims to significantly boost transparency, accountability, and global competitiveness within the country's apparel sector.

The DFP is designed to act as a unified digital tool to streamline data management and reporting at the factory level. The system is expected to not only reduce audit fatigue for factories but also improve efficiency in monitoring sustainability performance and help factories align with international buyers’ requirements using a standardized, AI-driven approach.

According to the BGMEA, this initiative is a crucial step towards future-proofing Bangladesh’s position as a global sourcing hub.

Mahmud Hasan Khan, President, BGMEA, emphasizes, innovation and digital transformation help advance the sector’s sustainability goals. Representatives from Digital Bridge Partners reaffirmed their commitment to supporting the industry with digital solutions that lead to greater efficiency and transparency.

According to a new knowledge paper released by the Confederation of Indian Textile Industry (CITI), India needs a multi-pronged strategy to strengthen ‘farm to factory; practices in its cotton sector and build export-ready ecosystems to meet the national target of $100 billion in textile exports by 2030.

The paper argues, the Indian cotton sector is at a critical crossroads where long-term growth hinges on the convergence of sustainability, innovation, and trade competitiveness, given the current challenges facing cotton production.

To secure a competitive edge in global markets, CITI calls on the government and industry to focus on promoting production of high-quality cotton by using certified seeds and sustainable farming practices. It should implement traceability systems and global certifications to guarantee consistent quality. The government should actively promote organic, fair-trade, and circular farming models. These sustainable cotton variants can command 20 per cent to 30 per cent higher prices in premium global markets.

Further, the paper states, there is a need to streamline procurement and stabilization mechanisms to ensure farmers receive better prices and reduce reliance on middlemen.

It also emphasizes, collaborative efforts between farmers, industry, and policymakers are crucial for ensuring Indian textiles consistently meet global benchmarks for quality, sustainability, and ethical sourcing.

Finally, the report highlights the necessity of supporting industry-led innovation in smart textiles and organic blends. This is particularly important given that India’s technical textiles market is already projected to reach $40 to $50 billion by 2025. Coordinated action, backed by strong policy, investment, and technology transfer, is essential for securing the sector's long-term future.