FW
The US House of Representatives has passed three-year extensions for the African Growth and Opportunity Act (AGOA) and the Haiti Economic Lift Program (HELP). On January 12, 2026, lawmakers voted 340-54 for the AGOA Extension Act and 345-45 for the HELP Extension Act, providing a legislative bridge through December 31, 2028. The move is specifically designed to halt the flight of apparel manufacturing from sub-Saharan Africa and Haiti following the programs' expiration on September 30, 2025, which had temporarily exposed exports to duties ranging from 10 per cent to 30 per cent.
Retroactive relief and nearshoring strategic value
A vital commercial provision of the new legislation is its retroactivity, allowing U.S. importers to claim refunds on duties paid during the four-month lapse. For the Haitian textile sector, which supports over 10,000 formal jobs, the extension of the HELP Act maintains duty-free rules for apparel regardless of yarn origin. Beth Hughes, Vice President of Trade at the American Apparel & Footwear Association (AAFA), noted that these programs are essential for ‘diversified sourcing goals’ and provide a counterweight to regional instability. By stabilizing these trade corridors, the US aims to protect nearshoring investments and prevent a ‘sourcing void’ that rival global powers are eager to fill.
Navigating the ‘Third-Country Fabric’ renewal
The legislation crucially preserves the ‘third-country fabric’ provision, a cornerstone for lesser-developed beneficiary countries like Kenya, Lesotho, and Madagascar. This rule allows manufacturers to source globally competitive yarns while retaining duty-free access to the U.S. market - a necessity for industries that lack vertical integration. While the three-year window is shorter than the 10-year renewal industry leaders sought, it provides the ‘predictability and certainty’ required for 2026 production cycles. Analysts suggest the extension also serves as leverage for the Trump administration to negotiate higher reciprocity, particularly with major partners like South Africa, whose eligibility remains under active review.
AGOA provides duty-free access for over 6,500 products from 32 eligible African nations. It mainly benefits the textiles and apparel industry. The extension aims to recover the 8 per cent export dip seen during the 2025 lapse. Enacted in 2000 (AGOA) and 2010 (HELP) to shift bilateral relations from aid to commerce.
In a decisive move against the rising tide of global protectionism, the European Union and the Mercosur bloc officially signed their long-awaited partnership and interim trade agreements in Asunción, Paraguay, on January 17, 2026. This landmark ceremony caps over 25 years of negotiations, establishing one of the world’s largest free-trade zones by connecting over 700 million consumers. For European industry, the timing is critical; as traditional trade corridors face volatility, this pact provides a stable, rules-based framework expected to add €77.6 billion to the EU’s GDP by 2040.
Dismantling barriers in high-value industrial segments
The agreement’s primary commercial impact lies in the sweeping elimination of duties on more than 90 per cent of EU exports. Industrial sectors that have long struggled against steep South American protectionist walls are the most immediate beneficiaries. Currently, Mercosur imposes a prohibitive 35 per cent tariff on European clothing, textiles, and footwear - barriers that will be phased out to zero under the new deal. This structural shift is projected to trigger a 39 per cent rise in EU exports to the region, allowing specialized European manufacturers to compete on a level playing field for the first time in decades.
Strategic diversification of supply chains
Beyond market access, the alliance serves as a strategic bulwark for European supply chain security. By securing preferential access to essential raw materials and critical minerals from Argentina and Brazil, the EU is effectively diversifying its sourcing away from over-dependence on a single dominant supplier. For the apparel and textile confederations, like Euratex, the deal facilitates a more resilient ‘proximity-neutral’ sourcing strategy for cotton and cellulose-based fibers. This integration is increasingly vital as European firms navigate the transition toward circular economy mandates and carbon-neutral production.
Navigating the final hurdles of ratification
While the signing marks a geopolitical victory, the narrative now shifts to the European Parliament for final consent. The ‘Interim Trade Agreement’ is designed to allow immediate market access and tariff reductions once Parliament approves, bypassing the longer process required for the full Partnership Agreement. However, the path remains complex; while industrial bodies celebrate the growth prospects, agricultural sectors in France and Ireland continue to voice concerns over import surges. The European Commission has responded with a €6.3 billion agricultural safeguard fund, ensuring that the transition toward this new trade equilibrium does not compromise domestic food security standards.
The agreement creates a trans-Atlantic marketplace involving 10 per cent of the world's population and a combined GDP of $22 trillion. It aims to harmonize regulatory standards while ensuring strict adherence to the Paris Agreement on climate change.
The EU is already Mercosur’s second-largest goods partner, with bilateral trade exceeding €111 billion in 2024. Full implementation of this agreement will eliminate approximately €4.5 billion in annual export duties, specifically empowering the 30,000 European SMEs currently active in the South American market.
The Parisian retail landscape is entering a period of significant realignment as Muji prepares to anchor the BPM (Beats Per Minute) redevelopment project on the Rue de Rivoli. Slated for a late 2026 opening, the Japanese minimalist powerhouse will occupy the 2,700-sq-m footprint formerly held by C&A. This move signifies more than just a real estate transaction; it is a direct challenge to the fast-fashion dominance in Europe’s top-10 busiest shopping streets, where footfall regularly exceeds 15 million annual visitors.
Scaling the ‘Comprehensive Minimalist’ lifestyle
Unlike previous smaller-scale boutiques, the Rivoli flagship will introduce approximately 85 per cent of Muji’s domestic Japanese catalog, a sharp increase from the 50 per cent currently available in European markets. The XXL format spans three levels, integrating high-margin categories such as childrenswear, electronics, and specialized skincare - a segment that drove record profits for parent company Ryohin Keikaku in FY25. By transitioning into a full lifestyle provider, Muji is capitalizing on the 2026 consumer trend toward ‘slow retail,’ where shoppers increasingly favor versatile, high-durability ‘investment pieces’ over disposable trends.
Strategic springboard for continental growth
The Paris flagship serves as a commercial laboratory for a broader European expansion, with similar ‘comprehensive range’ stores planned for London and Berlin. This aggressive footprint growth is backed by Ryohin Keikaku’s robust financial performance, which saw operating profit surge 31.5 per cent to 73.8 billion yen in the fiscal year ending August 2025. By embedding its ‘no-brand’ philosophy into the carbon-neutral BPM project - which targets BREEAM Excellent certification - Muji is aligning its growth with the EU’s 2026 sustainability mandates, ensuring long-term resilience in an increasingly eco-conscious regulatory environment.
Muji operates on a ‘no-brand quality goods’ philosophy, specializing in minimalist apparel, homeware, and skincare. With record-breaking FY25 revenues, the group is currently one year ahead of its mid-term expansion plan. Leveraging flagship launches in Paris and London to cement a 16.4 per cent operating margin across Europe and North America by 2027.
In a meeting with the Hong Kong Trade Development Council (HKTDC), Egypt’s General Authority for Investment and Free Zones (GAFI) explored opportunities for strengthening investment partnerships in the textile and ready-made garments sector.
The meeting was chaired by Mohamed El-Gousky, Chief Executive Officer of GAFI, and attended by Katherine Fang Suk Kwan, Chairwoman of HKTDC’s Garment Advisory Committee, alongside representatives of Egypt’s Apparel Export Council (AEC), a number of Egyptian companies, and leading textile and garment manufacturers from both sides.
Egypt’s textile and garment sector is among the country’s most competitive industries, supported by a well-established industrial base, accumulated expertise, a highly skilled workforce, and the availability of production inputs and qualified industrial infrastructure, said El-Gousky at the meeting. These strengths position Egypt as an ideal hub for industrial expansion, the localisation of value-added supply chains, and deeper integration with regional and international markets, he noted.
Highlighting the strategic importance of the partnership between Egypt and Hong Kong, El-Gousky describes it as a key driver in reshaping global value chains in the textile industry. Hong Kong serves as a gateway for Chinese and Asian companies seeking overseas expansion, as well as one of the world’s leading financial centres capable of mobilising investment financing, he adds.
In this context, Egypt represents a strategic gateway to African markets, offering investors access to a vast consumer base and preferential trade arrangements, El notes. GAFI is working to deepen cooperation with Hong Kong by fostering an open and continuous dialogue platform between the business communities of both sides and by providing a highly attractive and supportive investment environment, he adds further.
The Egypt government has established a dedicated unit to attract Chinese investments, offering fast-track services and ongoing support to address investors’ needs and challenges, Al-Gousky.
Hong Kong’s economic institutions do not view Egypt merely as a manufacturing base or an attractive investment destination, but as a strategic partner essential to the future of China’s textile and garment industry, states Katherine Fang Suk Kwan.
She highlights Egypt’s progress in developing production chains, strengthening trade relations, and improving compliance with sustainability standards, in addition to its competitive advantages in geographic location, skilled labour, and advanced infrastructure.
Meanwhile, Iris Wong, Director of External Relations at HKTDC, invited Egyptian companies to participate in the Council’s exhibitions and trade events, noting, HKTDC organizes around 40 specialised events in the textile and garment sector. These platforms offer valuable opportunities for Egyptian companies to exchange expertise, establish partnerships, and access new markets, particularly as Egypt is a cornerstone of China’s Belt and Road Initiative, she says.
Sherine Hosny, Executive Director, Egyptian Export Council for Ready-Made Garments, affirms, Egypt is a natural destination for the expansion of Chinese companies. She cites its competitive advantages, including labor availability, developed utilities, streamlined procedures, and preferential trade agreements with major global markets.
Egypt’s garment exports to the European Union and the United States increased by 97 per cent and 46 per cent, respectively, over the past five years, she reveals.
The meeting also featured promotional presentations highlighting investment opportunities in Egypt and the range of investment frameworks available to meet investors’ needs, in addition to bilateral meetings between companies from both sides interested in establishing investment partnerships.
Brazil is set to maintain its status as the world’s preeminent cotton exporter for the 2025-26 season, effectively decoupling its market dominance from a projected production dip. While the National Supply Company (Conab) recently revised its output forecast downward to 3.8 million metric tons - a 6.3 per cent decline from the previous cycle’s record - the industry is leveraging high carryover stocks and an aggressive export strategy to absorb global demand. This structural shift signals Brazil’s transition from a volume-chasing producer to a sophisticated market stabilizer that now commands nearly one-third of the world’s total cotton shipments.
Yield rationalization amidst climatic volatility
The current cycle faces a marginal yield contraction to 1,884 kg/ha, down from the exceptional 1,954 kg/ha recorded in 2024-25. This reduction is primarily a byproduct of tactical ‘safrinha’ (second-crop) planting windows in Mato Grosso, where producers are prioritizing soil health and cost-rationalization over sheer output. Raphael Bulascoschi, Analyst, StoneX, noted, while cotton remains highly competitive, the sector is entering a phase of ‘tighter margins,’ necessitating a shift toward efficient marketing management rather than land expansion.
Market displacement and the rise of ‘Green’ dominance
Brazil’s rise is most visible in its successful displacement of traditional suppliers in key Asian garment hubs. In a landmark shift, Brazil recently supplanted India as the primary cotton provider for Bangladesh, the world's second-largest apparel exporter, securing a 23 per cent market share. This ascent is fueled by the Responsible Brazilian Cotton (ABR) program, which now certifies 84 per cent of the national crop. By aligning with the Better Cotton Standard, Brazilian exporters are providing the traceable, low-carbon fiber required by European and North American retailers facing 2026's stringent ESG mandates.
Logistics and the ‘Cotton Brazil’ 2030 Vision
The Brazilian Cotton Producers Association (Abrapa) has renewed its strategic partnership with ApexBrasil to fulfill the ‘Cotton Brazil’ mission: becoming the absolute largest global exporter by 2030. Despite the production dip, export volumes are forecast to rise by 4 per cent to 3.06 million tons in 2026. This growth is supported by improved port logistics in the Matopiba region and a 16 per cent forward-selling rate already achieved for the new crop. As US supply remains constrained by acreage compression, Brazil’s ability to offer ‘stable supply at competitive pricing’ is reshaping the global textile hierarchy.
Abrapa manages the national sustainability and traceability programs. It mainly exports to China, Vietnam, and Bangladesh and for 100 per cent bale-by-bale traceability and top global exporter status by 2030. The association is known to have transformed Brazil from a net importer in the 1990s to a global leader through rainfed agronomic innovation.
The French textile and apparel industry is confronting a structural shift rather than a mere seasonal slump. The industry registered a 1.7 per cent contraction in total sales in 2025, according to the Institut Français de la Mode (IFM), ending the fragile stability seen in 2024. This downturn was exacerbated by a ‘climate shock’ in December, where temperatures soared 3.5°C above historic norms, effectively neutralizing the year-end demand for high-margin winter outerwear. While independent boutiques bore the brunt with a 6.8 per cent monthly plummet, specialized chains and department stores also reported significant contractions, signaling a universal retreat in physical retail footfall.
Sustainability as a survival strategy for 2026
The commercial narrative for 2026 is rapidly moving away from volume-based growth toward ‘Sustainable Couture 2.0.’ In response to the 2025 eco-tax on ultra-fast fashion, which levies up to €5 per item, French retailers are prioritizing high-durability and traceable collections. The maturation of France’s ‘Environmental Cost’ (Coût Environnemental) labeling means that by late 2026, fashion products must display standardized eco-scores as prominently as their price tags. Brands that have successfully integrated lifecycle assessments (LCAs) are seeing a ‘trust dividend’ from affluent consumers, particularly in the luxury segment, which is projected to grow at a 5.2 per cent CAGR through 2032, contrasting sharply with the broader market's stagnation.
Digital resilience amidst consumer cautiousness
While brick-and-mortar channels struggled, the industry is banking on ‘Techno-Tailoring’ and omnichannel maturity to stabilize revenues. E-commerce penetration is expected to dominate 2026 growth, supported by a 95.2 per cent national internet penetration rate. Leading retailers are repurposing physical stores as micro-fulfillment hubs to offer rapid, low-carbon delivery options. Despite a slight recovery in consumer confidence to 90 points in early 2026, household saving intentions remain at historic maximums. Retailers are consequently shifting focus to ‘investment pieces’ - apparel that combines classic French elegance with a verifiable, low-impact footprint—to capture the limited discretionary spend of a more climate-conscious public.
The IFM is a premier French institute providing economic observatory data and advanced fashion education. It monitors consumption trends for over 2,000 retail entities, guiding the sector's transition to a circular economy. Focusing on data-driven sustainability, IFM aims to lead the global standardization of fashion eco-labeling by 2030.
Spurred by an urgent industrial transition towards autonomous and circular manufacturing, the value of the global textile machinery sector is set to rise to $32.7 billion in 2026. Against this backdrop, the ITM 2026 International Textile Machinery Exhibition prepares to host over 1,200 exhibitors in Istanbul this June. Industry leaders are no longer viewing ‘Green Tech’ as a secondary specialty but as the primary driver of capital expenditure. With the Middle East and Africa projected to be the fastest-growing markets with a 6.3 per cent CAGR, the exhibition serves as the critical bridge for investors navigating high European production costs and the push for ‘lights-out’ factory operations.
Predictive intelligence and the rise of digital twins
The narrative at ITM 2026 has shifted from mechanical speed to data-led precision. Digital twin technology is now a central requirement for tier-one manufacturers, with early adopters reporting a 30 per cent reduction in commissioning time and a 12 per cent decrease in chemical waste through real-time simulation of dyeing and spinning profiles. As labor shortages strain global supply chains, the demand for Industry 4.0-ready, fully automated lines is outperforming semi-automatic alternatives, growing at a robust 6.7 per cent annual rate. These systems allow mills to monitor thermal profiles and energy usage per kilogram of yarn, turning unpredictable overheads into manageable data points.
Circularity and waterless dyeing scalability
Sustainability in 2026 is defined by ‘textile-to-textile’ recycling capabilities. Exhibition halls are expected to highlight machinery capable of chemically separating complex fiber blends - a final hurdle for the circular economy. Technologies such as CO₂-based waterless dyeing are gaining commercial traction, offering up to 90 per cent reductions in water consumption. According to Adil Nalbant, President, TEMSAD, Turkish machinery exports are on track to exceed $1 billion, driven by these R&D-heavy innovations. For global brands facing tightening ESG regulations, the hardware showcased at ITM 2026 represents the only viable path to compliance and long-term profitability in a resource-constrained market.
The ITM Exhibition is the premier global showcase for textile sub-sectors, including spinning, weaving, and finishing. Organized through a strategic partnership between Tüyap, Teknik Fuarcılık, and TEMSAD, it serves major markets across Eurasia and Africa. Recent performance indicates a 10 per cent increase in regional machinery exports, with 2026 plans focusing on integrating AI-driven quality control across all product categories to sustain Turkey’s position as a top-three global textile machinery hub.
As the global home textile market heads toward a $145.27 billion valuation in 2026, the industry is transitioning from simple product supply to integrated service solutions. The recent conclusion of Heimtextil 2026 in Frankfurt underscored a decisive shift: top-tier decision-makers now constitute 78 per cent of attendees, signaling that the event has evolved into a strategic war room for navigating a high-tariff, volatile trade landscape. With geopolitical tensions forcing a recalibration of sourcing toward ASEAN and European hubs, manufacturers are leveraging ‘Contract Business’ as a high-margin buffer against stagnant retail demand in traditional Western markets.
The hospitality pivot and the 2027 hybrid format
The most significant commercial development is the formal elevation of the hospitality sector. Data indicates, functional contract textiles are outperforming decorative basics, driven by a post-pandemic surge in high-end resort development and healthcare infrastructure. To capitalize on this, a landmark partnership with Hospitality Interiors Europe (HINT) was inaugurated, setting the stage for a dedicated parallel event in 2027. This move targets the lucrative project development segment where decision-makers from global chains like Marriott and IKEA seek ‘holistic’ interior concepts that merge material durability with aesthetic differentiation.
AI-driven craftsmanship and ESG compliance
Digital transformation has moved beyond the back office to the design loom. The ‘Texpertise Focus AI’ initiative demonstrated that predictive algorithms are now essential for mitigating high e-commerce return rates and optimizing material usage to meet the EU’s strict Ecodesign for Sustainable Products Regulation (ESPR). By integrating AI with traditional craftsmanship—a theme championed by architect Patricia Urquiola - mills are achieving a dual objective: hyper-personalized aesthetic ‘glitches’that appeal to Gen Z consumers and verifiable supply-chain transparency. For manufacturers, these technologies are no longer optional but the only viable pathway to maintaining margins amidst a 6.7 per cent weighted average tariff increase in global manufacturing.
Heimtextil is the global benchmark for home and contract textiles, connecting 3,000 international exhibitors with a high-caliber buyer network. Focused on the entire value chain - from upholstery to ‘Smart Bedding’ - the platform facilitates strategic sourcing across 148 nations. Following a 10 per cent rise in regional machinery exports, current growth plans center on AI integration and the expansion of the ‘Interior.Architecture.Hospitality’ segment to sustain market leadership through 2027.
As the value of the global home textile market rises to $145.27 billion in 2026, Trident Group is aggressively executing a multi-front expansion strategy across Europe. Currently showcasing at Heimtextil 2026 in Frankfurt, the Punjab-based integrated manufacturer is moving beyond traditional export models to a brand-led, localized approach. This shift is timed with a significant inflection point in trade policy: the anticipated signing of the India-EU Free Trade Agreement on January 27, 2026, which is expected to eliminate structural tariff barriers of 8–12 per cent that have historically constrained Indian textile competitiveness in the region.
Localized leadership and design-led innovation
To secure market share within the world's fastest-growing textile corridor, Trident has restructured its European operations by appointing dedicated Regional Directors for Germany and France. This localization strategy facilitates a ‘design-first’ model, exemplified by the launch of Trident Threads, a premium brand tailored for the high-end European and UK markets. By merging Indian manufacturing scale with European aesthetic sensibilities, the company is successfully penetrating the lucrative $6.68 billion UK home textile market, reporting robust buyer interest for its ‘Visible Invisible’ collection which prioritizes sustainable fiber blends and AI-enhanced finishes.
Sustainability capex and digital transformation
The group’s growth is underpinned by a Rs 1,000 crore capital expenditure program for FY25-26, with over 60 per cent allocated to renewable energy and circular manufacturing. This investment aligns with the EU’s tightening Ecodesign for Sustainable Products Regulation (ESPR), providing Trident a ‘first-mover’ advantage in supply-chain transparency. Furthermore, the company’s ‘Digital Trident’ initiative - aiming for full Industry 4.0 integration - has already yielded a 4.68 per cent Y-o-Y revenue increase in Q2 FY2026. This data-driven approach allows for real-time monitoring of resource consumption, ensuring the company remains a preferred partner for global retail giants seeking ethical and efficient sourcing.
Trident Limited is a diversified conglomerate and a top-two global exporter of home textiles, primarily serving the bathroom and bed linen segments. The company targets a consolidated revenue of Rs 25,000 crore by 2027, supported by its wheat straw-based paper manufacturing and chemical divisions. Founded in 1990, Trident’s 2026 outlook focuses on tripling domestic retail touchpoints to 10,000 while scaling its European subsidiary to capture high-margin contract business.
The Australian fashion landscape is witnessing a significant structural shift as cult label Sass & Bide prepares to enter a temporary hiatus. Parent company Myer confirmed on January 15, 2026, it is pausing the brand’s retail operations to execute a comprehensive creative ‘reinvention.’The transition involves shuttering 14 Myer concessions by late January and winding down the digital storefront by the end of February. This maneuver aims to extract the brand from a period of artistic dilution, where conservative tailoring had replaced the "indie sleaze" aesthetic that once attracted global icons like Beyoncé and Kate Moss.
Strategic realignment for the next-gen consumer
The reset occurs against a backdrop of complex macroeconomic pressures. Australian retail is currently grappling with a ‘job hugging’ trend, where consumer caution is at an all-time high; LinkedIn research indicates only 51 per cent of Australians plan to change roles in 2026, down from 59 per cent in 2025. By pausing Sass & Bide, Myer is clearing the floor for a high-velocity brand infusion, including the exclusive February 2026 return of Topshop across all 56 department stores. This is a unique opportunity to draw on substantial heritage while becoming relevant for a new generation, stated a Myer spokesperson. The relaunch is expected to pivot back to house signatures - embellished denim and hardware-heavy hardware—aligned with the current Y2K and vintage-maximalist revival.
Inventory liquidation and market repositioning
To facilitate the reset, Sass & Bide has initiated an aggressive liquidation strategy, offering markdowns of up to 50 per cent. This inventory clearance is vital as Myer integrates its Apparel Brands division, which faced a non-cash impairment of $213.3 million in FY25 due to softening demand. The retailer is now betting on smaller, scarcity-driven capsule drops rather than broad seasonal assortments. This ‘read-and-react’ design model is intended to reduce reliance on promotional cycles and rebuild the brand’s premium equity before its anticipated return to the high street later this year.
Owned by Myer since a $70 million dual-staged acquisition (2011–2013), Sass & Bide is a cornerstone of the group’s ‘exclusive brands’ portfolio. Including Marcs and David Lawrence, the brand generated approximately 26 per cent of group sales in FY25. The 2026 roadmap focuses on AI-driven supply chain efficiency and a return to ‘art-school energy’ design to capture the evolving Gen Z and Millennial demographic.
