Indian Textile and Apparel Exports Register Significant YoY Degrowth in March 2026

Why It Matters

The sharp export contraction signals pressure on India’s garment sector, affecting trade balances and global supply chains, while policy levers such as tariffs and cotton duties could reshape competitiveness.

Key Takeaways

• FY 2025‑26 textile exports fell 2.86% YoY.
• Apparel exports slipped 1.36% YoY in same period.
• March 2026 apparel exports plunged 18.99% year‑over‑year.
• CITI cites 50% US tariff as export headwind.
• MMF segment gaining traction; cotton duty removal urged.

Pulse Analysis

India’s textile and apparel industry, long a cornerstone of its export portfolio, posted a modest 2.21% decline in FY 2025‑26, bringing total shipments to roughly $35.8 billion. While the year‑long dip appears contained, the March 2026 data reveal a more acute contraction, with apparel exports tumbling nearly 19% and textiles slipping close to 10% compared with the same month a year earlier. These figures underscore a broader slowdown in global demand for traditional cotton‑based garments, as consumers shift toward synthetic and sustainable alternatives.

A key driver behind the export erosion is the 50% tariff imposed by the United States, which lingered for over five months during the previous fiscal year. Despite this steep barrier, CITI’s Ashwin Chandran noted that the overall FY impact was limited to a 2.21% drop, reflecting the sector’s resilience and diversification into higher‑margin segments. The man‑made fibre (MMF) category, in particular, is aligning with evolving consumption patterns, offering lighter, moisture‑wicking products that appeal to athleisure and performance‑wear markets. Chandran’s call to eliminate the cotton import duty aims to reduce input costs and boost the competitiveness of domestically produced fabrics.

Looking ahead, policymakers and industry leaders face a crossroads. Removing the cotton duty could lower raw‑material expenses, encouraging manufacturers to scale up and offset tariff‑related losses. Simultaneously, investment in MMF capacity and sustainable production practices may capture a larger share of the global market that is pivoting away from conventional textiles. For investors, the sector’s ability to adapt to trade policy shifts and consumer trends will be a decisive factor in determining whether India can reclaim growth momentum and solidify its position as a leading apparel exporter.