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United States textile and apparel imports demonstrated surprising structural resilience in Q4, 2025, even as the regulatory environment underwent significant shifts. Despite the imposition of reciprocal tariffs that reached an effective average of 16.0 per cent - the highest level since the 1930s - import volumes from key partners remained stable during the first three quarters. However, the market entered a period of acute volatility in early 2026 following a landmark Supreme Court ruling that invalidated sweeping executive tariffs imposed under the International Emergency Economic Powers Act (IEEPA). This judicial ‘reset’ saw effective rates plummet from 16.0 per cent to 9.1 per cent overnight, only to be partially offset by a new 10–15 per cent temporary import duty enacted under Section 122 of the Trade Act of 1974.
Diversification beyond traditional powerhouses
The 2025-26 period has solidified a permanent reconfiguration of the US supply chain. China’s market share in apparel value dropped to 11.3 per cent by late 2025, a historic low compared to nearly 20 per cent a year prior. Vietnam and Bangladesh have emerged as the primary beneficiaries of this ‘China Plus One’ strategy, with Vietnam consolidating its lead through a 12.9 per cent annual increase in shipments. Despite facing punitive reciprocal duties that peaked at 63.4 per cent on certain apparel lines, India managed to keep annual export values to the US broadly stable at $9.68 billion, proving the indispensability of its cotton-based product categories.
Fiscal impacts and consumer pass-through
The commercial impact of these trade barriers has primarily manifested in pricing rather than a cessation of trade. Data from The Budget Lab at Yale indicates that tariff costs were passed through to consumers at rates between 31 per cent and 63 per cent for core goods. While inventory replenishment initially drove a 6.59 per cent rise in import value during mid-2025, the subsequent ‘tariff-rush’ led to erratic shipping schedules. Retailers are now navigating a complex landscape where the threat of permanent 15 per cent global duties looms, potentially adding $1,300 in annual costs for the average household.
The global textile and apparel sector serves as the backbone of trade for emerging economies, with the US remaining the world's largest consumer market, importing over $118 billion annually. Leading suppliers like India and Vietnam focus on vertically integrated cotton and man-made fiber production.
Established in the post-quota era, these markets are now transitioning toward sustainable, ‘mulesing-free’ wool and recycled synthetics. Despite 2026 geopolitical headwinds, the sector targets a 4–5 per cent CAGR, supported by digitalized supply chains and high-speed freight corridors designed to offset rising logistics costs.
The apparel business has always thrived on rhythm. Designers forecast seasons, retailers plan months ahead, and factories lock in orders long before the first thread is spun. Predictability has traditionally been the invisible fabric holding together a $2.5-trillion global ecosystem. That rhythm has now been broken.
In early 2026, what should have been a routine policy recalibration turned into a legal and fiscal whiplash that caught the industry mid-shipment. A ruling from the US Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act, briefly clearing the way for lower import duties. Yet, before exporters or retailers could recalibrate their spreadsheets, the White House invoked Section 122 of the Trade Act of 1974, first imposing a 10 per cent global tariff and then raising it to 15 per cent within a day. The speed of that reversal mattered more than the rate itself.
For an industry that books orders half a year in advance and ships goods across oceans for a month at a time, the sudden change turned every container into a moving financial bet. Garments that left factories with one cost assumption could arrive in American ports under an entirely different one. The result is not merely higher duties. It is the normalization of uncertainty.
A legal reset that didn’t deliver relief
For many exporters across India, Vietnam and Bangladesh, the court decision initially looked like a reprieve. Tariffs imposed under emergency powers had pushed effective rates for some categories of apparel into punitive territory. Certain products, once cumulative measures were applied, carried duties high enough to wipe out profitability entirely.
When those measures were invalidated, sourcing teams restarted frozen orders and factories ramped up production. Capacity that had been idling began to hum again. Buyers anticipated a return to rational pricing. But the policy window lasted barely long enough for celebration. The administration’s rapid shift to Section 122 created a new baseline that applied broadly rather than selectively. Instead of extreme penalties on a few countries, a flat surcharge now touched almost everyone.
In effect, the system moved from targeted pain to universal cost. That distinction reshaped the competitive scenario. Earlier, suppliers outside China could offset some duties through geographic advantage. Now that advantage has largely evaporated.
When the high seas became a balance sheet
Apparel logistics normally follow a tightly scripted choreography. Containers leave Asian ports, cross the Pacific for roughly 30 days, clear customs, and move straight to distribution centers timed to seasonal retail calendars. Under volatile tariffs, that choreography has dissolved.
Freight forwarders describe an unusual phenomenon: cargo vessels treated less as transport assets and more as floating warehouses. Importers attempt to manage arrival dates with unusual precision, knowing that a shift of even 48 hours could change duty liability by millions of dollars. Some shipments are held offshore, some routed through bonded facilities, and others delayed strategically while buyers wait for clarity. The ocean has effectively become a financial hedge.
For inventory worth billions of dollars, the difference between a 10 per cent and 15 per cent duty is the difference between a profitable season and a loss-making one. The garments themselves have not changed. The tax environment around them has.
The economic scorecard of a moving target
Trade economists from the The Budget Lab at Yale, working alongside projections from the United Nations Conference on Trade and Development, have attempted to quantify how the new framework alters both consumer costs and macroeconomic performance.
Table 1: Projected economic effects of tariff regimes on apparel imports
|
Projected for 2026 |
Pre-SCOTUS (IEEPA) |
Post-SCOTUS (Section 122 @ 15%) |
|
Effective Tariff Rate (Apparel) |
16.00% |
13.70% |
|
PCE Price Level Impact |
+1.2% |
+1.0% |
|
Average Household Loss in $ (2025) |
$1,577 |
$1,315 |
|
Est. Long-run GDP Impact |
-0.29% |
-0.21% |
At first glance, the new system appears marginally less damaging. Average tariff rates decline slightly and household losses are lower. However, this numerical improvement masks a change that matters more to suppliers. Under the earlier regime, some countries were hit hard while others benefited from diversion. Under the new structure, the burden is spread evenly, creating a permanent cost floor for everyone. The opportunity to gain share through geography has narrowed sharply. For exporters, it is not simply about paying less or more. It is about losing flexibility.
Margins under siege in everyday apparel
The pressure is most acute in the middle of the market. Luxury labels can raise prices without alienating customers. A designer shirt increasing by $15 is rarely a deal-breaker. Basic apparel has no such buffer. The value segment competes on pennies, not dollars.
Suppliers of everyday knitwear like T-shirts, innerwear, children’s basics operate on margins of 5 to 8 per cent. A flat 15 per cent duty can erase those margins almost entirely.
Table: Cost sensitivity of a typical basic garment export
|
Item |
Pre-tariff |
Post 15% tariff |
|
FOB Price |
$4.00 |
$4.00 |
|
Landed Cost (duty incl.) |
$4.40 |
$4.60 |
|
Retailer Markup |
2.2x |
2.2x |
|
Shelf Price |
$9.68 |
$10.12 |
|
Supplier Net Margin |
6-8% |
0-2% |
Clearly a seemingly small increase of 20 cents per unit reshapes the entire equation. Retailers hesitate to lift shelf prices because mass consumers are highly price sensitive. Instead, the additional cost is absorbed by suppliers, compressing profit to near zero. When scaled across millions of pieces, that erosion becomes existential. In hubs such as Tiruppur, the consequence is visible in altered order patterns. Rather than committing to large volumes of a few styles, buyers increasingly demand smaller lots across many designs. Factories that once depended on scale now prioritize flexibility, reducing exposure to sudden policy shocks and minimizing unsold inventory. The business is fragmenting to survive.
From cost efficiency to risk insurance
For decades, the apparel trade was optimized for lowest possible production cost. Sourcing strategies favored single large factories, long contracts and high volumes. The new environment rewards the opposite instincts.
Executives increasingly speak of risk premiums rather than efficiencies. Warehousing goods in bonded facilities delays duty payments until the moment of sale, effectively buying time. Diversifying production across multiple countries spreads exposure. Reclassifying materials or adjusting product specifications can sometimes lower applicable duty codes. Even nearshoring to Mexico or Central America, though more expensive to produce, reduces transit time and therefore policy risk.
Table: Strategic risk-management measures in 2026
|
Strategy |
Purpose |
Typical cost impact |
Risk reduction |
|
Bonded Warehousing |
Delay duty payment |
+1-2% logistics |
High |
|
Multi-country sourcing |
Diversify exposure |
+2-3% overhead |
High |
|
Tariff engineering |
Lower duty codes |
+1% complianc e |
Medium |
|
Nearshoring |
Faster customs entry |
+4-6% production |
Medium-High |
Each approach raises costs. Yet the willingness to accept those costs signals a deeper shift. Companies now treat resilience as a form of insurance. Spending a few extra percentage points to reduce volatility is preferable to risking sudden double-digit losses when policies change overnight. Efficiency alone is no longer enough.
Temporary laws, permanent anxiety
Although Section 122 measures are technically time-bound, few industry leaders expect calm to return quickly. Signals from the Office of the United States Trade Representative suggest further Section 301 investigations could follow, potentially leading to long-term actions. The result is a pervasive hesitation to invest. Factories that increase capacity during the China-plus-one wave now question whether those bets will pay off. Capital expenditure decisions are slowing. Buyers are shortening contracts. The industry’s planning horizon, once measured in years, has shrunk to quarters. Fatigue is setting in.
An industry rewriting its playbook
The apparel supply chain was built on the assumption that trade policy might change occasionally but would not swing dramatically week to week. That assumption no longer holds. Today, success belongs to companies with strong balance sheets, diversified sourcing and the agility to pivot quickly. Smaller players without financial buffers are increasingly vulnerable. Consolidation appears inevitable as only the most resilient operators absorb repeated shocks.
The transformation is subtle but profound. The sector is moving away from pure cost leadership toward risk management as a central strategy. Garments may still be stitched in the same factories and sold in the same stores. Yet behind every price tag now sits a new calculation, one that factors not only cotton and labor, but courts, executive orders and the unpredictability of politics. For a business that once trusted the calendar, the real clock now ticks in Washington. And until that clock slows, every container crossing the ocean will carry not just clothes, but uncertainty stitched into every seam.
India’s textile industry long powered by cotton, fragmented supply chains, and small manufacturers running on thin margins is stepping into a radically different era. At a packed industry consultation in New Delhi this February, the Ministry of Textiles outlined what is arguably the most comprehensive restructuring blueprint the sector has seen in decades. The message was blunt: the future will belong to manufacturers that are automated, sustainable, capital-efficient and globally compliant.
The headline announcement, a Rs 10,000 crore SME Growth Fund is not just another subsidy pool. It signals a deeper shift from piecemeal incentives toward systemic modernization. Combined with the new TEEM (Textile Expansion and Employment Mission) scheme and the Tex Eco Initiative, the government is attempting to re-engineer the entire “fibre-to-fashion” value chain.
The timing is deliberate. With the impending India-UK trade pact expected to eliminate tariffs on nearly all textile goods and global buyers tightening ESG norms, India sees a rare window to leapfrog competitors rather than merely catching up. As Neelam Shami Rao, Secretary, Ministry of Textiles described it the sector has a “timely and strategic advantage.” The question now is whether the industry can move fast enough to convert policy momentum into factory-floor transformation.
From incrementalism to industrial strategy
For years, textile policy largely revolved around subsidies for spinning mills and incremental export benefits. That approach kept the industry afloat but did little to solve deeper structural problems: outdated looms, under-capitalised SMEs, weak processing infrastructure, and environmental non-compliance.
The 2026 framework breaks from that tradition. Instead of supporting isolated segments, the government is treating textiles like a coordinated industrial ecosystem: synchronizing machinery, finance, skills, logistics, and sustainability standards. The TEEM scheme focuses on modernization capital for weaving, processing, and garmenting. The Tex Eco Initiative embeds circularity and resource efficiency into manufacturing standards, effectively making “green compliance” a cost of entry for global trade rather than an optional upgrade.
Industry leaders say this marks a philosophical shift: productivity and sustainability are now seen as competitive tools, not regulatory burdens.
A sector with big ambitions and bigger gaps
India’s targets for 2030 are bold, nearly doubling both market size and exports. But the numbers reveal the scale of the climb ahead.
Table: Textile industry growth roadmap
|
Metric |
Current status (2025-26) |
Vision 2030 |
|
Total Market Size |
$179 bn |
$350 bn |
|
Export Value |
$44 bn |
$100 bn |
|
Global Export Share |
4.30% |
10% |
|
MMF Share in Exports |
42% |
60%+ |
This isn’t marginal growth, it’s structural expansion. To reach $350 billion, the industry must sustain double-digit annual growth for nearly a decade. Export value needs to more than double, while India’s global share must jump from 4.3 to 10 per cent, effectively challenging established exporters like Vietnam and Bangladesh. Perhaps the most critical shift is the rise of Man-Made Fibres (MMF). Global fashion demand increasingly favors synthetics and performance fabrics, yet India remains heavily cotton-dependent. Raising MMF share from 42 to 60 per cent isn’t just diversification it’s survival in a changing global market.
Capital, the real constraint
Policy vision alone doesn’t buy new looms. Modern weaving and processing lines cost crores. Imported machinery often attracts duties nearing 27 per cent. For MSMEs, already operating on tight margins and long receivable cycles, upgrading technology has been financially out of reach. This is where the Rs 10,000 crore SME Growth Fund come is focus. The fund aims to nurture what policymakers call Champion SMEs, mid-sized firms capable of scaling quickly if capital barriers are lowered. Alongside this, enhancements to the Trade Receivables Discounting System (TReDS) are expected to improve liquidity. The platform has already facilitated more than Rs 7 lakh crore in credit flows, offering manufacturers faster access to working capital. Together, these tools attempt to solve the two chronic ailments of the textile MSME: delayed payments and expensive debt. Without fixing those, modernization simply doesn’t happen.
Sustainability moves from PR to price tag
For decades, environmental compliance was often seen as a marketing add-on. Today, it is a contractual obligation. European and British buyers now demand end-to-end traceability, wastewater control, carbon accounting, and circular production. Non-compliant suppliers risk losing orders entirely.
The Tex Eco Initiative addresses this reality by incentivising water recycling systems, chemical management protocols, and energy efficiency upgrades. Meanwhile, digital technologies like AI-led quality checks, blockchain traceability, automated cutting rooms are moving from pilot projects to production floors. As Updeep Singh, Director-Growth Initiatives as Welspun Living noted during consultations, the AI dividend has finally reached manufacturing. Smart factories are no longer futuristic they are becoming prerequisites for export credibility.
Building scale through mega clusters
India’s textile landscape remains fragmented into thousands of small units. That fragmentation limits bargaining power, raises logistics costs, and discourages global buyers seeking large, reliable suppliers. The answer: integrated mega parks. Under the PM MITRA Parks programme, seven textile regions are being built with plug-and-play infrastructure common effluent treatment plants, warehousing, testing labs, and logistics hubs.
Cluster-based production cuts transport costs, improves turnaround time, and helps factories achieve scale comparable to Southeast Asian competitors. Shared infrastructure also lowers compliance costs, especially for environmental treatment systems that smaller units cannot afford individually. For global brands shifting away from China under the China Plus One strategy, such integrated ecosystems make India more investable.
Skills and logistics, the missing link
Modern machinery is only as good as the workforce running it. To address this, the government has upgraded the Samarth 2.0 training programme. The target is ambitious: train 10 lakh workers in digital manufacturing, technical textiles, and precision processes. This reflects a subtle but critical shift textiles are no longer purely labor-intensive. They are becoming skill-intensive. The next generation of workers will need to operate automated looms, manage data dashboards, and maintain smart machinery — roles that blend engineering with manufacturing.
Despite policy advances, some disadvantages persist. India’s logistics costs hover around 11 per cent of export value, compared to 7-8 per cent in Vietnam. That difference can erase profit margins in price-sensitive categories. To counter this, the government has extended export obligation periods from six to eighteen months and is rationalizing GST across the value chain. These changes aim to reduce working capital lock-ups and simplify compliance.
Still, meaningful competitiveness will depend on faster ports, multimodal transport, and state-level infrastructure upgrades areas that fall outside textile policy but directly influence export viability.
Trade policy is the final piece of the puzzle. The upcoming free trade agreement with the UK is expected to remove tariffs that previously placed Indian exporters at a 9-12 per cent disadvantage. Duty-free access could immediately improve price competitiveness, especially in garments and home textiles. Officials believe this could help double bilateral trade by 2030, but only if Indian manufacturers can meet sustainability and delivery standards. In other words, the opportunity is real, but conditional.
From cotton legacy to smart manufacturing
Today, textiles contribute roughly 2.3 per cent to India’s GDP, 12 per cent of exports, and employ more than 45 million people. Few sectors carry such broad economic and social weight. Yet the industry’s future won’t be built on legacy strengths alone.
Cotton dominance must give way to MMF and technical textiles. Small workshops must consolidate into scalable clusters. Manual processes must adopt automation. And green compliance must become standard practice.
The Rs 10,000 crore SME Growth Fund is therefore less a financial announcement and more a strategic signal: India is betting that modernization, not protectionism will secure its place in the next global supply chain cycle. If execution matches ambition, the coming decade could transform India from a volume player into a value leader. If not, the opportunity window may close as quickly as it opened. For now, the loom has been set. The real weaving begins on the factory floor.
The Middle East has emerged as the global centre for luxury, with the regional market valued at approximately €15.02 billion in 2025 and on track to reach €35 billion by 2031. While global luxury spending remained relatively flat in 2024, the Gulf Cooperation Council (GCC) defied the slowdown with strong growth driven by high-net-worth individuals and a surge in tourism. This resilience is anchored by a massive influx of private wealth; the UAE alone attracted a record 9,800 millionaires in 2025, the highest net inflow globally. However, the real story lies behind the scenes, where a few regional powerhouses control the infrastructure and cultural gatekeeping that allows global brands to thrive.
Who controls the Gulf luxury market
The GCC luxury market is a mix of global conglomerates and dominant regional family-owned groups that manage market entry and licensing. While European giants like LVMH and Kering dominate brand ownership, the on-the-ground control is held by distributors who run stores and e-commerce. Chalhoub Group is the primary luxury retail partner in the Middle East, specializing in high-end fashion and beauty with over 950 stores. Al Tayer Group, through its retail division Al Tayer Insignia, leads in both physical and digital luxury channels, representing nearly 80 brands. Alshaya Group acts as a powerhouse for mass-to-premium lifestyle retail, operating over 4,000 stores across the region.
|
Group |
Market position |
Estimated influence/reach |
|
Chalhoub Group |
Market leader in luxury fashion/beauty |
950+ stores across MENA & GCC |
|
Alshaya Group |
Leading premium lifestyle franchise operator |
4,000+ stores across MENA, Turkey, Europe |
|
Al Tayer Group |
Digital & Physical luxury channel leader |
200+ stores; e-commerce leadership (Ounass) |
|
Majid Al Futtaim |
Major mall operator & retail partner |
30+ new stores launched in 2025 |
From ultra-luxury to premium lifestyle
Each group maintains a distinct portfolio that defines its segment dominance. Chalhoub holds the keys to absolute luxury, while Al Tayer blends ultra-luxury with high-end department stores. Alshaya focuses on global premium lifestyle brands that scale across all city tiers.
• Chalhoub Group Portfolio: Focused on elite fashion and beauty, they represent Louis Vuitton, Dior, and Lancôme. They also own stakes in brands like Christofle, Tanagra, and Level Shoes.
• Al Tayer Group Portfolio: They represent global titans like Prada and operate major department stores like Bloomingdale's. Their portfolio also extends into luxury automotive with brands like Ferrari.
• Alshaya Group Portfolio: A powerhouse for premium lifestyle, managing Victoria's Secret, Starbucks, and H&M. They also run higher-end outlets like Harvey Nichols Kuwait.
The regional appetite for luxury is highly segmented, with fashion remaining the cornerstone, contributing 35.28 per cent of the GCC luxury market in 2025. Watches and Jewellery are poised for the highest growth among product types, with a projected 10.50 per cent CAGR to 2031.
|
Market Segment |
2025 market share (%) |
Projected growth (CAGR) |
Drivers |
|
Clothing & Apparel |
35.28% |
5.30% |
Preference for haute couture; status expression |
|
Watches & Jewellery |
38.00% |
10.98% |
Investment-grade items; heritage focus |
|
Beauty & Fragrances |
15.00% |
12.00% |
Gen Z digital influence; Skincare surge (+17%) |
|
Online Platforms |
13.00% |
12.30% |
2-hour delivery; mobile-first Gen Z habits |
Regional dynamics within the gulf
While the UAE currently commands the largest market share at 48.15 per cent, the regional dynamics are shifting as Saudi Arabia emerges as the fastest-growing powerhouse with a projected 10.05 per cent CAGR through 2031. Saudi Arabia's Vision 2030 and the $17 billion Red Sea Global project are transforming the Kingdom from a domestic-only market into a global luxury destination. Simultaneously, Qatar is leveraging its post-World Cup infrastructure and a 90 per cent reduction in business registration fees to sustain a 10.15 per cent growth rate, reaching an expected $2.63 billion by 2031. Kuwait remains a critical high-value market, characterized by the region's most informed local buyers who prioritize heritage and artisan craftsmanship over mere brand scale.
Ounass and the two-hour luxury standard
Al Tayer Group’s Ounass has set a global benchmark for luxury e-commerce by solving the trust gap in the Middle East. While only 13 per cent of luxury sales in the GCC happen online, Ounass has secured leadership through hyper-local logistics, offering two-hour delivery in Dubai and three-hour service in Riyadh. Their strategy involves blending global couture with local cultural markers, such as campaigns for Ramadan and Eid, which honor regional aesthetics. This localized digital approach is essential in a market where women account for over 65 per cent of total luxury spending.
The global apparel industry is no longer dressing for occasions. It is dressing for continuity. What began as a pandemic-era relaxation of wardrobes has hardened into a permanent reset for fashion retail. Across offices, airports, malls, and digital storefronts, formality has steadily ceded ground to function. Tailoring has given way to stretch. Structure has surrendered to softness. And ‘casual’, once shorthand for weekends, has become the default language of everyday life.
The most telling evidence of this shift is not emerging from denim’s historic heartland in the US but from Southeast Asia. New consumer data shows Singapore and the Philippines overtaking Western markets in their embrace of casual attire, underscoring how the next phase of global apparel growth is being shaped far from traditional fashion capitals. This reordering of demand has boosted the casual wear economy projected to reach $667.63 billion in 2026, transforming sourcing strategies, retail technology, and product design worldwide.
From pandemic habit to wardrobe staple
Casualization has matured from a temporary behavioral adjustment into a structural consumer preference. During lockdowns, comfort became essential. But even as offices reopened, the appetite for restrictive dress codes failed to return. Instead, hybrid work, urban commuting, and digitally mediated lifestyles entrenched the need for adaptable clothing that transitions seamlessly between environments.
The result is a retail environment where comfort is no longer a category; it is the baseline expectation. At a global level, the casual wear market is now growing at a CAGR of 3.89 per cent, steady rather than explosive, but powerful enough to steadily capture share from formalwear and occasion-based segments. This kind of sustained, predictable growth is particularly attractive to brands seeking resilience amid macroeconomic volatility.
Southeast Asia the epicenter of casual demand
Fresh consumer insight data reveals a surprising geographic leadership in casual adoption. While the US has long been culturally synonymous with jeans and t-shirts, its dominance is fading in relative terms. Singapore and the Philippines now lead the world in casual affinity, with adoption rates that outpace every Western economy surveyed.
Table: Casual wear preference by country
|
Country |
Regular casual wearers |
|
Philippines |
84% |
|
Singapore |
82% |
|
Australia |
80% |
|
United Kingdom |
76% |
|
United States |
69% |
|
Italy |
68% |
|
Germany |
36% |
The table illustrates a clear power shift. The Philippines tops the chart with 84 per cent of respondents identifying casual wear as their default mode of dress, closely followed by Singapore at 82 per cent. Both markets benefit from year-round tropical climates, dense urban commuting patterns, and digitally integrated lifestyles that reward mobility and comfort.
Australia and the UK form a second tier of high adoption, reinforcing the idea that relaxed dress codes are increasingly normalized across Anglo markets. The US, often perceived as the archetype of casual fashion, surprisingly trails behind these peers at 69 per cent.
Germany stands out as a European anomaly. With only 36 per cent leaning toward casual attire, consumers there demonstrate stronger preferences for streetwear, vintage aesthetics, and alternative style codes, highlighting that casualization is not universally defined but culturally mediated.
For brands, this table is more than demographic trivia. It signals where growth capital and merchandising focus should migrate. Southeast Asia is no longer merely a sourcing base; it is rapidly becoming a demand engine.
Redefining casual from basics to engineered utility
If the geography of casual wear is changing, so too is its definition as the modern consumer is no longer satisfied with soft cotton staples. Instead, expectations now mirror the performance standards once reserved for sportswear. Breathability, stretch recovery, wrinkle resistance, and moisture management have entered everyday wardrobes.
Retailers increasingly describe these upgraded essentials as ‘nu-niforms’, garments that blur the line between professional and leisure settings. A commuter might wear the same technical trousers from a morning meeting to an evening workout, or an overshirt that functions equally as outerwear and office attire. This evolution reflects deeper consumer priorities. Surveys indicate that 64 per cent of shoppers now rank durability and material integrity above brand prestige, a signal that quality and longevity are overtaking logo-driven purchasing behavior. The implication is clear: engineering matters as much as aesthetics. Fabric science is becoming the new branding.
Performance casual becomes a strategic moat
Few companies illustrate this shift better than Uniqlo and Levi’s, both of which have quietly repositioned themselves as performance-first casual specialists. Uniqlo’s LifeWear strategy, which integrates technical properties into minimalist silhouettes, has allowed the company to carve out a 12.2 per cent global market share in the casual segment. Moisture-wicking office trousers, stretch denim, and thermo-regulating layers allow the brand to sell comfort as infrastructure rather than trend. Levi’s, meanwhile, has modernized its core denim offering through stretch blends and hybrid fits that prioritize mobility, enabling it to stay relevant even as younger consumers drift toward athleisure.
What unites both approaches is the understanding that casual wear is no longer about looking relaxed. It is about performing better throughout the day.
AI moves to the storefront
As physical comfort becomes table stakes, the competitive battlefield is increasingly digital. Retailers are discovering that casual shoppers, who purchase frequently and across multiple micro-ocassions, demand speed and personalization. This has led to the rise of ‘agentic commerce’, where artificial intelligence or AI systems act as personal shopping assistants.
By 2026, 25 per cent of consumers are expected to purchase fashion directly through AI intermediaries, bypassing traditional browsing entirely. These assistants recommend size, fit, and style based on behavioral data, reducing friction and returns. Platforms deploying AI-driven recommendations report measurable performance gains. Product clicks have risen by roughly 20 per cent, while conversion rates jump as much as 70 per cent when shoppers engage with algorithmic suggestions.
For retailers operating in high-volume casual categories, these efficiencies translate directly into margin protection. Faster discovery means fewer abandoned carts. Better sizing means fewer costly reverse logistics. Casual wear, in essence, is becoming both physically and digitally frictionless.
Casual’s dominance in a $1.44 trillion industry
The global fashion industry now stands at $1.44 trillion in value, and casual wear commands an outsized share of that pie.
Table: Global apparel landscape: 2026 snapshot
|
Metric |
Value |
|
Global apparel market size |
$1.44 tn |
|
Casual segment share |
36.70% |
|
Casual wear market value |
$667.63 bn |
|
Casual CAGR |
3.89% |
|
India apparel revenue forecast |
$109.5 bn |
|
India volume growth (2026) |
3.60% |
This data highlights how central casual has become to industry economics. With a 36.7 per cent share, the segment accounts for more than one-third of total global apparel revenues, effectively acting as the industry’s stabilizing core. India’s projected $109.5 billion apparel revenue underscores the importance of emerging markets in sustaining growth. And this growth is increasingly tied to nearshoring, faster replenishment cycles, and tech-enabled supply chains, all of which align naturally with the high-turnover nature of casual basics.
Nearshoring reduces lead times for replenishing best-selling essentials. AI-native logistics improve forecasting accuracy. Together, these shifts help brands satisfy consumers who expect constant availability of everyday staples.
Supply chains follow the casual consumer
Behind the scenes, sourcing strategies are evolving just as rapidly as merchandising. Companies are investing in regional production hubs and shorter supply loops to respond quickly to demand spikes. Casual wear’s predictability makes it ideal for this model. Unlike seasonal fashion, which risks obsolescence, everyday essentials generate steady, replenishable demand.
This shift favors countries with strong textile ecosystems and scalable manufacturing capacity, including India, Vietnam, and parts of Southeast Asia. The same regions leading consumption are increasingly capturing value creation as well. The result is a tighter, faster, more localized apparel value chain designed around speed rather than spectacle.
Comfort as the new currency of fashion
Taken together, these trends reveal a profound rebalancing of the fashion industry. Casual wear is no longer a secondary category tucked behind formal collections. It has become the operating system of modern wardrobes. Geography has shifted leadership toward Southeast Asia. Product design now emphasizes engineering over ornamentation. Retail is being rebuilt around AI. And supply chains are reorganizing for velocity.
The companies that succeed in this environment will not be those chasing runway theatrics. They will be the ones mastering everyday reliability.
In 2026, fashion’s most powerful statement is no longer about standing out. It is about fitting seamlessly into life. And increasingly, that life is dressed casually.
Indian apparel and textile exporters are grappling with a "perfect storm" this week as the central government unexpectedly halved benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. The notification, issued by the Directorate General of Foreign Trade (DGFT) on February 23, 2026, slashes notified rates and value caps by 50% with immediate effect. This fiscal contraction arrives at a precarious moment: just days after the US trade landscape shifted from a 10% global surcharge to a more aggressive 15% tariff, leaving billions in existing order books vulnerable to sudden margin erosion.
Fiscal squeeze meets global protectionism
The move to rationalize RoDTEP benefits is a direct fallout of the FY27 Union Budget, which saw the scheme’s allocation plummet from ₹18,233 crore to just ₹10,000 crore. For the textile sector—a high-volume, low-margin industry—this isn’t just a policy adjustment; it’s a direct hit to price competitiveness.
Industry veterans warn that because RoDTEP is designed to neutralize domestic taxes that cannot be recovered otherwise, cutting these rates is equivalent to exporting Indian taxes to global markets. In a sector where a 1% cost difference can determine whether a contract stays in India or moves to Vietnam or Bangladesh, a 50% reduction in tax remission is a significant blow.
|
Indicator |
FY2025-26 (Actuals) |
FY2026-27 (Budgeted) |
% Change |
|
RoDTEP Allocation |
₹18,233 Crore |
₹10,000 Crore |
-45.15% |
|
Max RoDTEP Rate |
4.30% |
2.15% |
-50.00% |
|
Cotton Staple Cap |
₹1.60/kg |
₹0.80/kg |
-50.00% |
The 150-Day US tariff seesaw
Compounding the domestic subsidy cut is the erratic trade signals coming from Washington. Following a US Supreme Court ruling that struck down previous "emergency" tariffs, the Trump administration initially signaled a 10% global surcharge under Section 122 of the Trade Act of 1974. However, within 24 hours, that figure was revised upward to 15%, effective February 24, 2026.
While this 15% rate is currently the ceiling permitted under Section 122 for a 150-day window, the lack of a permanent bilateral deal leaves Indian goods in a "no-man's land" of pricing. The Global Trade Research Initiative (GTRI) notes that Indian exporters are currently rushing shipments to beat further escalations, yet they now find themselves doing so with significantly reduced domestic support.
Apparel hubs in the crosshairs
For apparel clusters in Tirupur, Noida, and Ludhiana, the timing is "deeply disturbing." Many exporters had already locked in prices for the upcoming spring-summer season based on previous RoDTEP rates. The "immediate effect" of the DGFT notification means that shipments currently at ports or in mid-production will no longer fetch the expected rebates.
According to data from the Confederation of Indian Textile Industry (CITI), combined textile and apparel exports already fell by 3.75% in January 2026 to $3.27 billion. This trend is expected to worsen as the effective tax burden rises.
Consider cas of a cotton exporter
A mid-sized cotton yarn exporter typically operates on a net margin of 3-4%. Previously, a RoDTEP rebate of 3% acted as their primary profit buffer, allowing them to price a unit at ₹97 instead of ₹100 to remain competitive against Vietnamese suppliers. With the rebate now slashed to 1.5%, their effective cost jumps to ₹98.5. In the high-volume US retail market, this 1.5% hike is often enough for a buyer to shift the entire seasonal contract to a duty-exempt competitor like Bangladesh.
The textile & apparel Sector outlook
The Indian textile and apparel industry remains the nation’s second-largest employer, specializing in cotton-based garments and home textiles. Key hubs like Tirupur dominate the US market, which accounts for nearly 30% of India's apparel exports. Despite a marginal 0.61% growth in overall merchandise exports in January 2026, the sector’s share in the total export basket slipped from 9.37% to 8.96%.
The immediate financial outlook is clouded by a widening trade deficit, reaching $34.68 billion in January. Ratings agency ICRA has recently revised the apparel export outlook to "Negative," forecasting a revenue shrink of 6-9% in FY27 if current tariff pressures and subsidy cuts persist. Historically a resilient pillar of Indian trade, the sector now faces a transition period where it must survive on thinner margins until a stable India-US trade framework is finalized.
A sudden restructuring of the global trade order occurred this week following a landmark US Supreme Court ruling that struck down previous ‘emergency’levies. In immediate retaliation, the Trump administration utilized Section 122 of the Trade Act of 1974 to implement a uniform 15 per cent global tariff on all imports. This maneuver effectively resets the apparel and textile landscape, creating a ‘zero-sum’ environment that favors low-cost manufacturing hubs while penalizing previous trade partners who held preferential status.
Competitive realignment in textile hubs
India and China have emerged as the primary beneficiaries of this administrative shift. Previously burdened by cumulative ‘reciprocal’ and punitive duties that reached as high as 50 per cent for Indian textiles and 54 per cent for Chinese goods, both nations now face a significantly reduced 15 per cent baseline. Market reaction was instantaneous; Indian textile giants like Trident and Welspun Living saw equity gains of up to 7.6 per cent, as analysts project an exponential rise in export volumes to the US under the more competitive pricing structure.
Erosion of European and British trade advantages
Conversely, the ‘leveling’ of tariffs has stripped the United Kingdom and the European Union of their hard-won trade advantages. Under prior bilateral agreements, UK-made apparel and EU luxury goods enjoyed preferential rates as low as 10 per cent. The new flat 15 per cent rate not only increases costs for British exporters but also threatens to ‘freeze’ the EU-US customs deal reached last summer. European Commission officials have responded with a ‘deal is a deal’ ultimatum, warning that any breach of agreed tariff ceilings could trigger retaliatory measures on American agricultural exports.
Global asset management and investment firm, Gordon Brothers has finalized the acquisition of the Chinese Laundry brand portfolio from CELS Brands. Announced in February 2026, the transaction includes the namesake label along with sister brands Dirty Laundry, CL by Laundry, and 42 Gold. This move transitions the Los Angeles-based footwear staple from a traditional retail operation into a brand-licensing and distribution platform.
Inventory liquidation and operational restructuring
As part of a comprehensive capital solution, Gordon Brothers is overseeing the orderly wind-down of Chinese Laundry’s physical retail presence. The firm is currently managing the disposition of approximately 1.5 million pairs of shoes, offering a significant bulk-inventory opportunity for third-party retailers. This tactical liquidation facilitates a clean exit from brick-and-mortar liabilities, allowing the brand to refocus on high-margin digital and wholesale channels.
Market positioning and future growth
The acquisition comes at a time when the footwear sector is seeing a 11 per cent decrease in average retail prices, as consumers increasingly prioritize the sub-$500 ‘accessible luxury’ segment. By integrating Chinese Laundry into a stable that includes Nicole Miller and Laura Ashley, Gordon Brothers intends to leverage its global licensing infrastructure. David Chin, Managing Director of Brands, noted, the firm will prioritize expanded distribution through new licensees to scale the brand's reach without the overhead of owned storefronts
Founded in 1971, Chinese Laundry evolved from a retail fixture business into a dominant force in women’s contemporary footwear. The brand currently operates across four distinct price tiers, catering to diverse demographics from Gen Z ‘fast fashion’ to premium leather goods. Following its 2026 acquisition, the company is projected to operate as an asset-light entity, focusing on e-commerce and wholesale partnerships to maintain its global footprint.
The attainment of B Corp Certification by Longchamp marks a strategic transition from voluntary corporate social responsibility to verified institutional accountability. In an era where the luxury market is projected to reach €380 billion by 2030, the family-owned maison is leveraging its independent structure to implement granular supply chain reforms that larger, multi-brand conglomerates often find difficult to execute.
This certification serves as a critical pre-emptive measure against the European Union’s upcoming Ecodesign for Sustainable Products Regulation. By aligning its governance with B Lab’s rigorous performance standards, Longchamp has solidified its market position, particularly as 64 per cent of luxury consumers now declare that a brand’s ethical credentials significantly influence their loyalty and purchasing frequency.
Circularity and the economics of repair
Beyond the symbolic value of the B Corp seal, Longchamp is scaling its infrastructure to meet the demands of a circular economy. The company’s commitment to increasing global repair center capacity by 20 per cent reflects a shift toward product longevity as a core revenue driver.
This initiative complements the successful transition of the signature Le Pliage range to 100 per cent recycled polyamide, which helped drive a record €1.25 billion in turnover. While the luxury sector navigates a broader cooling of demand in certain Asian hubs, Longchamp’s focus on ‘conscious luxury’ provides a buffer. The brand is betting that the long-term equity gained from environmental stewardship will outweigh the immediate administrative costs of compliance, securing its relevance among a younger demographic that views handbags as durable investments rather than disposable fashion.
Artisanal heritage and market expansion
Longchamp is a premier French leather goods house specializing in handbags, luggage, and accessories across 80 international markets. Founded in 1948 by Jean Cassegrain, the company remains independently family-owned. Its current strategy emphasizes expanding retail footprints in mainland China and the United States while sustaining high double-digit revenue growth.
The traditional high-street dominance of Primark is navigating a rigorous stress test as the retailer confronts a dual challenge from ultra-fast digital competitors and shifting consumer patterns. In its latest trading update for the 16 weeks ending January 3, 2026, parent company Associated British Foods (ABF) reported a 2.7 per cent decline in group like-for-like sales, despite a 1 per cent increase in total revenue to £3.5 billion.
While the retailer’s ‘Anti-Ecommerce’ stance was long a hallmark of its low-cost model, management has countered recent market share erosion by finalizing the nationwide rollout of Click & Collect across all 187 Great Britain stores. This strategic infrastructure shift aims to retain a younger, tech-savvy demographic that has increasingly migrated to platforms like Shein, which generated an estimated $38 billion in revenue in 2024.
Strategic expansion and geographic divergence
The retail landscape currently presents a stark regional contrast; while Primark’s UK operations showed resilience with a 1.7 per cent like-for-like growth, continental European markets saw a sharper 5.7 per cent contraction due to weakened consumer confidence. To offset these domestic headwinds, Primark is aggressively scaling its international footprint, recording a 12 per cent sales growth in the United States and launching its first franchise in Kuwait this quarter. Analysts at GlobalData suggest, while physical store expansion remains a primary revenue lever,
Primark’s long-term stability hinges on its ability to synchronize ‘Everyday Value’ with the real-time responsiveness of digital-first rivals. As the company forecasts a steady 10 per cent operating margin for FY26, the focus has shifted toward high-margin house brands and a low-stock holding model to minimize markdowns and enhance profitability in a volatile global economy.
The retail division of Associated British Foods, Primark is a leading international value fashion chain offering apparel, beauty, and homeware. It operates over 450 stores in 17 markets, with aggressive growth targets in the US and the Middle East. Founded in 1969, the brand maintains a high-volume, low-margin business model.
