India's Textile and Apparel Exports Down by 3.75% in January, Outlook Improves Now with India US Interim Deal

Why It Matters

The tariff cut could restore price parity in the U.S. market, reviving demand and stabilizing a key export sector that contributes nearly 9% of India’s foreign‑exchange earnings.

Key Takeaways

• January exports fell 3.75% due to US tariffs
• Cotton yarn and fabrics down over 4% year‑on‑year
• Man‑made yarn segment grew 1% despite overall decline
• Carpet and jute product exports plunged double‑digit percentages
• Post‑Feb 7 tariff cut expected to boost competitiveness

Pulse Analysis

The Indian textile and apparel industry, long a cornerstone of the country's export basket, recorded a 3.75 % contraction in January 2026, slipping to $3.27 billion from $3.40 billion a year earlier. The primary driver was the continuation of the United States' Section 301 tariffs, which remained in force until February 7, eroding price competitiveness for cotton yarn, fabrics and handloom products. This dip not only reduced the sector's share of total Indian exports to 8.96 % but also signaled vulnerability to trade policy volatility in a market that contributes nearly 9 % of foreign exchange earnings.

Segment‑level data reveal a mixed picture. Cotton‑based categories—yarn, fabrics, made‑ups—registered a 4.15 % decline, while carpet and jute‑derived goods fell 12 % and 19 % respectively, reflecting both tariff pressure and shifting global demand. In contrast, the man‑made yarn segment posted modest growth of 1 %, suggesting niche resilience amid broader weakness. On the supply side, imports of raw and waste cotton surged 12.33 % in January and 72 % over the April‑January window, indicating heightened domestic sourcing to offset export shortfalls and stabilize inventory.

The interim US‑India tariff reduction announced for February 7 offers a timely catalyst for recovery. By lowering import duties, the move should restore price parity for Indian textiles in the American market, reviving demand for cotton and blended fabrics. Analysts anticipate a gradual rebound in shipment volumes, with apparel exports already showing a 1.59 % year‑over‑year rise for the April‑January period. Companies that diversify product mixes, invest in higher‑value synthetic blends, and leverage emerging trade agreements will be best positioned to capture the upside as the sector regains its export momentum.

India's textile and apparel exports down by 3.75% in January, outlook improves now with India US interim deal

Source: ANI · Last Updated: Feb 17, 2026, 08:18:00 AM IST

New Delhi: India's textile and apparel exports registered a decline in January compared with the same period last year, largely due to high tariffs imposed by the United States that remained in force till February 7.

The tariffs impacted export competitiveness and led to lower shipments during the month.

According to the data shared by the Confederation of Indian Textile Industry (CITI), textile exports in January have declined by ‑3.68 %, while apparel exports are down by ‑3.84 % in January 2026 compared with January 2025.

Overall, combined exports of textiles and apparel stood at US $3,275.44 million in January 2026, down from US $3,403.19 million in January 2025, registering a degrowth of ‑3.75 %.

The decline was mainly seen across key textile segments. Exports of cotton yarn, fabrics, made‑ups, and handloom products fell by ‑4.15 % to US $995.58 million in January 2026 from US $1,038.69 million in January 2025.

Carpet exports also declined sharply by ‑12.05 % to US $118.99 million, while exports of jute‑manufactured products, including floor coverings, dropped significantly by ‑18.92 % during the same period. Handicrafts, excluding handmade carpets, also saw a decline of ‑2.70 %.

However, exports of man‑made yarn, fabrics, and made‑ups showed some resilience and recorded a slight growth of 1.01 %, rising to US $430.29 million in January 2026 compared with US $425.97 million in January 2025.

The data further revealed that during the period from April 2025 to January 2026, textile exports registered a degrowth of ‑2.35 %, while apparel exports recorded a growth of 1.59 % compared with the same period of the previous financial year.

Despite this growth in apparel exports, cumulative textile and apparel exports during April 2025 to January 2026 registered a marginal decline of ‑0.65 % compared with April 2024 to January 2025.

The share of textile and apparel exports in India's total exports also declined. The sector accounted for 8.96 % of total exports in January 2026, compared with 9.37 % in January 2025.

For the April 2025 to January 2026 period, the share stood at 8.13 %, lower than 8.36 % in the same period of the previous year.

On the import side, imports of cotton raw and waste increased significantly by 12.33 % in January 2026 and rose sharply by 72.36 % during the April 2025 to January 2026 period. This increase suggests higher domestic demand for raw materials or supply adjustments within the textile industry.

Now the outlook is expected to improve going forward following the United States' reduction of tariffs on February 7. The tariff reduction is likely to improve India's export competitiveness and support recovery in textile and apparel shipments in the coming months.