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The story of America’s clothing industry is one of contrast: booming demand from consumers but shrinking capacity at home to produce what they wear. As globalization deepens its hold on the apparel trade, the US garment sector has steadily ceded ground, both in domestic production and global exports, while imports continue to swell.
Domestic output shrinks against the economy’s growth
At the turn of the millennium, US garment exports was a modest yet notable share of the economy which was 0.55 per cent of GDP in 2000. Two decades later that contribution has withered to just 0.21 per cent in 2024.
Table: US garment exports as a per cent of GDP
|
Year |
Garment exports |
|
2000 |
0.55% |
|
2002 |
0.52% |
|
2004 |
0.53% |
|
2006 |
0.50% |
|
2008 |
0.48% |
|
2010 |
0.47% |
|
2012 |
0.47% |
|
2014 |
0.46% |
|
2016 |
0.43% |
|
2018 |
0.40% |
|
2020 |
0.34% |
|
2022 |
0.31% |
|
2024 |
0.21% |
This decline underscores a broader reality: the US has lost its competitive edge as a garment exporter. Once part of the backbone of America’s manufacturing identity, clothing production has been increasingly sidelined by industries with higher value-add or faster innovation cycles. As per a senior analyst at the US Department of Commerce garment exports tells a bigger story about American industry and that is, they are no longer making clothing for the world. Instead, they are largely consuming what the world makes for the US.
Imports fill the gap
As domestic capacity eroded, imports rose to meet America’s insatiable demand for affordable fashion. The value of apparel brought into the US has more than doubled over two decades, from $46.3 billion in 2000 to $117.5 billion in 2023. Volume tells a similar story. Imports jumped from 22.1 billion square meter equivalents (SME) in 2000 to 39.8 billion SME in 2023.
Table: US apparel imports in value and volume
|
Year |
Imports value ($ bn) |
Imports volume (SME bn) |
|
2000 |
46.3 |
22.1 |
|
2005 |
67.8 |
30.3 |
|
2010 |
75.2 |
29.5 |
|
2015 |
81.6 |
31.2 |
|
2020 |
69.3 |
26.8 |
|
2022 |
102 |
36.5 |
|
2023 |
117.5 |
39.8 |
Source: U.S. Department of Commerce, Office of Textiles and Apparel (OTEXA)
While the dip in 2020 reflects pandemic-related disruptions, the post-pandemic rebound has been dramatic, with imports hitting historic highs. The growing dependency is clear: without foreign producers, US retailers would struggle to stock their shelves.
Why the shift?
Four forces underpin this transformation.
Labor costs: Wages in Asia and other developing regions remain far below US levels, giving overseas producers a decisive edge.
Globalized supply chains: Modern logistics make it seamless for American brands to source garments from multiple countries with efficiency.
Consumer price sensitivity: The appetite for ‘fast fashion’ at low prices drives retailers to prioritize imports.
Branding over manufacturing: US companies are increasingly investing in design, retail and marketing while leaving production to offshore partners.
As an industry consultant says, American apparel brands no longer see themselves as manufacturers. They are curators of lifestyle and identity. The sewing machines are thousands of miles away.
The bigger picture
The interplay between falling exports and rising imports signals a structural redefinition of the US apparel sector. Domestic manufacturing is shrinking not because Americans buy fewer clothes, but because the system that supplies them has been outsourced. The US remains the world’s biggest fashion consumer, but no longer a major maker.
Some niche opportunities remain luxury manufacturing, sustainable local brands, and advanced textile innovation but the long arc points toward continued reliance on international supply chains. In essence, America’s role in apparel has shifted from producer to consumer, mirroring broader trends in manufacturing across multiple industries. As one trade expert put it: “The label may say ‘designed in New York’ or ‘marketed from Los Angeles,’ but increasingly, it reads ‘made in Bangladesh, Vietnam, or China.’ That’s the new reality of American fashion.”
Looking beyond 2030
If current pattern hold, US apparel imports could reach $150-160 billion in value and over 45 billion SMEs in volume by 2030, backed by a mix of rising consumer demand, fast-fashion cycles, and growing dependence on Asian production hubs. At the same time, domestic garment exports as a share of GDP are likely to shrink even further possibly falling below 0.15 per cent by the decade’s end. But there are caveats. Several trends could alter the picture.
Reshoring & nearshoring: Automation, robotics, and trade tensions may push some production back to the US or nearby regions like Mexico and Central America.
Sustainability pressures: Climate-conscious consumers and new regulations could favor shorter supply chains and ethically sourced clothing, offering an opening for US-based manufacturing.
Geopolitical risks: Over-reliance on a few Asian countries could spur diversification, though not necessarily a return to large-scale U.S. garment production.
Still, the structural reality remains. And that is the US is unlikely to regain its former status as a garment powerhouse. Instead, the battle will be over how much of the supply chain risk it can reduce and whether the push for sustainability can carve out competitive niches for local manufacturers. “By 2030, the question won’t be whether America makes its clothes again,” said a trade policy researcher. “It will be whether America can afford the vulnerabilities that come with relying so heavily on everyone else to make them.”
When Finance Minister Nirmala Sitharaman rose to chair the latest GST Council meeting, few expected the sweeping changes that would follow. Yet, what emerged was a long-awaited relief package for India’s fashion and textile industry, an industry that employs nearly 45 million people and contributes about 2 per cent to the country’s GDP.
The Council’s decision to reduce taxes across the textile value chain is being hailed as a watershed moment for an industry often strangled by complex tax structures and inverted duty anomalies. For consumers, it means lighter bills at the checkout counter; for businesses, it translates into improved margins, competitiveness, and hope for revival at a time when global headwinds threaten exports.
A closer look at the GST overhaul
The Council’s reforms touched nearly every stage of the industry’s value chain from fibers to finished garments.
Table: Changes in GST
|
Segment |
Earlier GST rate |
Revised GST rate |
Impact |
|
Apparel & Footwear (up to ₹2,500) |
12% (above Rs 1,000) |
5% |
Wider affordability for middle-class buyers |
|
Man-Made Fibres (MMF) & Yarns |
18% |
5% (uniform across textiles) |
Resolves inverted duty structure, aids manufacturers |
|
Packaging Materials (cartons, boxes, etc.) |
12% |
5% |
Reduces input costs for exporters and brands |
|
Threshold for Garments |
Rs 1,000 |
₹2,500 |
Expands low-GST bracket, boosts mid-market demand |
For years, the inverted duty structure where raw materials were taxed higher than finished products had distorted supply chains. By ironing out these anomalies, the government has signaled that it wants to put textiles, one of India’s oldest industries, on a stronger footing.
Industry gives ‘Wow’ with a word of caution
“This is nothing short of a big wow for Indian citizens,” said Sanjay K Jain, Chairman of the ICC National Textiles Committee. “Lower GST means lower inflation, higher disposable incomes, and healthier balance sheets for textile firms. It’s a triple win.”
The Clothing Manufacturers Association of India (CMAI) welcomed the changes as it says, the government has accepted two major requests of the industry, removal of the inverted duty structure by making the entire value chain from fibre onwards charged at one rate that is 5 per cent and adopting a fiber-neutral policy, by equating the MMF and cotton fiber chains. The increase of 5 per cent limit from Rs 1000 to Rs 2500 is also an extremely positive move. However, Rahul Mehta, Chief Mentor of the Clothing Manufacturers Association of India (CMAI), warned that the reforms must be implemented carefully. “Uniformity of rates is welcome, but execution matters. If inverted duties creep back due to policy misalignments, we could lose the competitive advantage we just gained,” he said.
Why to consumers
The reforms are particularly significant for India’s growing middle class. Footwear and apparel are essential lifestyle spends, but with inflation eating into household budgets, affordability has been a key concern. By lowering GST on products up to Rs 2,500, the government has ensured that branded shirts, saris, sneakers, and formal shoes fall within reach for millions of consumers.
Table: Impact on consumers
|
Product |
Earlier price in Rs (Incl. 12% GST) |
Revised price in Rs (Incl. 5% GST) |
Savings |
|
Cotton Kurta priced 1,800 |
2,016 |
1,890 |
126 |
|
Sneakers priced 2,400 |
2,688 |
2,520 |
168 |
|
School Uniform set (1,200) |
1,344 |
1,260 |
84 |
For an average family of four, annual apparel and footwear purchases could now cost Rs 3,000-4,000 less, a meaningful saving in urban as well as Tier-II, III cities.
The export dimension
India’s textile and apparel exports were worth Rs 41.5 billion in FY2024, with garments making up nearly half. But the industry has struggled in recent months due to falling global demand and stiff tariffs particularly from the US, where additional duties of up to 50 per cent loom large.
The GST reforms, while domestic in nature, are expected to strengthen India’s cost competitiveness abroad by reducing input costs. Exporters in hubs like Tiruppur, Surat, and Ludhiana believe this will help them undercut competition from Bangladesh and Vietnam.
Table:
|
Market |
Export value ($ bn) |
Share in total exports |
|
US |
11 |
26% |
|
EU |
9.2 |
22% |
|
UAE & Middle East |
5.4 |
13% |
|
Others |
15.9 |
39% |
|
Total |
41.5 |
100% |
Global buyers are extremely price-sensitive. Every percentage point in tax reduction helps Indian manufacturers to bid more competitively, say Tiruppur- exporters who supply cotton T-shirts to US retailers.
Implementation will be key
While industry bodies have celebrated the reforms, experts caution that GST compliance and refund delays remain a thorn. Small and medium enterprises (SMEs), which account for nearly 80 per cent of India’s apparel output, often struggle with blocked working capital due to late refunds. “The uniform GST rate is historic, but it must be backed by faster refunds and simpler filing. Otherwise, cash-flow problems will continue,” noted Anupama Dalmia, a textile policy analyst.
Overall the GST reforms are being seen as more than just a tax cut they are a reset button for India’s textile and fashion sector. By reducing costs for both producers and consumers, the reforms promise to drive demand, unlock competitiveness, and revive an industry that is both a cultural mainstay and a critical job generator.
As the festive season approaches, retailers expect an increase in sales, while exporters eye a stronger global presence. But the true test will lie in implementation: whether the system can deliver on the promise of simplicity and speed. For now, the industry is cautiously optimistic its fabric stitched together by a tax system finally designed to support, not stifle, its growth.
The mid-2025 stage is important. As the world inches toward 2030, the fashion industry finds itself at a crossroads between regretful delays and transformative potential. The Apparel Impact Institute’s (Aii) latest report, ‘Taking Stock of Progress Against the Roadmap to Net Zero (2025)’, doesn't just measure emissions, it highlights a story of imbalance, ambition, and opening pathways.
A reality check on the Numbers and stakes
Fashion once comfortably occupied the shadows of climate discussions. But that has changed. The Aii report underscores that while in 2021 the sector accounted for about 1.8 per cent of global greenhouse gas emissions, already an alarming figure, this could climb to 1.27 gigatonnes by 2030 if current trends continue. To stay on track with the 1.5°C pathway, emissions must fall to roughly 0.489 gigatonnes by 2030, a daunting but achievable goal only with collective resolve.
The report shows emissions are not evenly distributed across the supply chain. The largest source of emissions, at 55 per cent, is Tier 2 textile processing. This includes textile formation, preparation, coloration, and finishing. Raw material production follows, accounting for 22 per cent of emissions. Raw material processing (Tier 3) accounts for 15 per cent and finished goods manufacturing that is Tier 1 accounts for 8 per cent.
The timing couldn't be more urgent. Brands are faltering as a survey revealed that while half of major players have set science-based targets, 40 per cent actually saw increases in emissions last year many without offering tangible support to their suppliers.
Manufacturers step into the fray
In this tense reality, a subtle shift is happening not at the top, but in the workshop, the dyeing floor, and factory roofs across Asia. As global brands hesitate, manufacturers in India, Bangladesh, Vietnam, and China are stepping up with action. A garment maker in India, for instance, is constructing a net-zero factory powered by solar and biomass climate-resilient, worker-safe, and built for extremes of heat. Such initiatives signal that decarbonization momentum may be shifting toward the Global South’s factories.
Despite sobering numbers, the report strikes a hopeful note: change is underway. More than 600 apparel companies have now committed to science-based climate targets, placing the sector ahead of most industries in its race to decarbonize. On the ground, progress is visible. In Pakistan, Artistic Milliners has added 100 MW of wind power to the national grid, while China’s Shenzhou Group now sources over 60 per cent of its electricity from renewables and is pushing toward a full coal phase-out by 2030.
In materials innovation, Ambercycle is turning polyester waste into new fiber at half the carbon cost of virgin polyester, backed by a €70 million pledge from Inditex. Meanwhile, Taiwan’s Far Eastern New Century cut more than 36,000 tonnes of emissions in a single year through energy efficiency projects. Together, these examples highlight a sector experimenting boldly with solutions. The momentum is real—but the report makes clear that scaling such efforts is essential if the industry is to meet its climate commitments.
The investment gap between India and Bangladesh India’s ambition is monumental. The government envisions tripling the fashion sector’s value to $350 billion by 2030, pushed up by mega-parks and two million new jobs. At the same time, decarbonization is essential not optional.
Aii and Development Finance International revealed that India needs $6.5 billion to cut apparel emissions by 45 per cent by 2030 but only has access to $2.5 billion, leaving a $4 billion hole. Still, India has strengths to leverage: a strong network of energy-efficiency service providers, falling solar prices, supportive policies like electricity wheeling reforms, and innovative design models such as the ‘Future Forward Factory’ that offer modular, near-net-zero solutions.
On the other hand, Bangladesh’s apparel sector is the backbone of its economy and is deeply exposed yet increasingly proactive. Over 80 per cent of its exports now come from garment production, which also employs millions of workers mostly women.
A recent Aii-DFI report reveals that $6.6 billion is needed to halve emissions by 2030. Of that, only $1.6 billion is available, with a further $175 million anticipated leaving a $4.8 billion gap. Yet despite challenges limited rooftop space, energy infrastructure hurdles, and modest policy support suppliers are innovating. Bangladesh hosts over 240 LEED-certified factories, the highest globally, and is piloting solar PV, energy-efficiency programs, and technical readiness initiatives
Blueprints for collective action
The report offers more than diagnostics, it reveals how solutions might scale. For example, the Fashion Climate Fund, backed by H&M Foundation and Aii, already supports hundreds of high-emission facilities across India, Bangladesh, China, and Vietnam. It blends funding, technical support, and data transparency, targeting reductions of 30-50 million tonnes CO₂ by 2030 from just this initiative.
Similarly the Future Supplier Initiative, a partnership between The Fashion Pact and Aii, brings with brands like H&M, Gap, Mango and banks together to co-finance decarbonization projects in Bangladesh, layering technical assistance on top of de-risked loans.
In Bangladesh, Aii's Climate Solutions Portfolio, underwritten by grants and revolving funding, provides live data on interventions like rooftop solar and wasteheat recovery showing that decarbonization can deliver real returns.
A call to action
Indeed, fashion’s climate journey is a complex weave of energy, finance, materials, and policy. The report concludes with a call to action for all stakeholders. It emphasizes that the gap between what's needed and what's happening isn't a gap in ideas, but in action, investment, and scale. The path forward requires coordinated efforts from brands, manufacturers, and financial institutions.
For brands and retailers, this means making financing a core part of their strategy, prioritizing proven solutions from registries like Aii's Climate Solutions Portfolio, and aligning their sourcing to favor low-carbon suppliers. Manufacturers are urged to adopt cost-saving solutions, engage in climate programs like the Manufacturer Climate Action Program (MCAP), and publicly share their progress. Finally, financial institutions and philanthropies are called upon to support catalytic models and develop financial instruments that directly reward emissions reductions
Of course, Aii's 2025 report isn’t a final verdict it’s a challenge issued. It reminds us, that global goals cutting emissions in half by 2030 can still be met, if the world acts. India and Bangladesh are at the vanguard; their factories are laboratories for what’s possible. Aii's funds and alliances are the infrastructure. The path to net zero in fashion may just begin with humility—as well as ambition—rooted in the factory dust and powered by the sun.
Primark has launched its first-ever integrated UK brand campaign to promote a new and improved Autumn/Winter women's denim range. Titled ‘In Denim We Can,’ the campaign aims to make consumers reconsider how much they should spend on a great pair of jeans.
The campaign highlights the work Primark has done over the past year to refine the fit, sizing, styles, and overall quality of its denim collection. Shoppers can now experience these improvements firsthand in all UK stores and through the Click & Collect service.
Primark spent more than a year listening to customer feedback to improve the consistency of its sizing and fit. The new collection introduces a new base size and standardized waist and leg lengths to ensure a more consistent and flattering fit. After extensive testing, the brand is launching with 10 key denim styles - from classic skinny and straight cuts to trendy barrel and wide-leg shapes - along with matching denim jackets, shirts, and tops.
The collection also reflects Primark’s broader commitment to sustainability. All eligible denim has gone through the retailer’s durability framework, and all jeans in the campaign are made with recycled cotton or cotton from the Primark Cotton Project. Three of the 10 jean styles are designed with circularity in mind, made without elastane or metal rivets so they can be more easily recycled.
Primark is also updating its in-store denim sections later this year with a new look and feel to make it easier for customers to explore and try on the new styles.
The standout piece of the new line is the 100 per cent cotton palazzo jean, priced at just £12 (about $16.70). Available in a mid-blue and an almost-black wash, this new product is the first item to be featured in Primark's new ‘Major Finds’ promotion. This initiative will highlight on-trend products and styles at unbeatable prices, available in-store and through Click & Collect while supplies last.
According to Mary Lucas, Director-Womenswear Trading, Primark, the company is raising the bar on its denim and is confident it is their ‘best one yet.’ Matt Houston, Chief Customer and Digital Officer, believes, the campaign will remind customers that Primark offers ‘quality, style and incredible value’ in its denim.
Sri Lanka's garment exports grew by 9.09 per cent in the first seven months of 2025, reaching $2.92 billion, a notable increase from the $2.67 billion recorded during the same period in 2024. This growth was fueled by strong demand for apparel in key international markets.
Exports to the European Union (excluding the UK) increased by 18.2 per cent, while shipments to ‘Other’ markets grew by 11.02 per cent. Exports to the United Kingdom experienced a more modest gain of 5.65 per cent, and those to the United States increased by 2.91 per cent.
While textile exports declined by 3 per cent in H1, 2025, the combined value of textile and garment exports still accounted for more than half of the country's total industrial shipments. The month of July alone saw a 9.84 per cent rise in exports, and a rise in apparel imports indicates a revival in domestic consumption. This consistent growth across major markets highlights the Sri Lankan apparel industry's strong global position and adaptability.
DKNY has roped in Hailey Bieber as its new global brand ambassador for the Fall 2025 campaign. This collaboration highlights Bieber's confidence, creativity, and fashion sense, as she embodies the spirit of DKNY.
The campaign features her styling of redesigned classics from the DKNY est 1989 capsule alongside contemporary silhouettes, blending nostalgic and modern elements. Key pieces include structured blazers, oversized outerwear, and modern accessories, all set against a backdrop that reflects New York's industrial aesthetic.
DKNY's campaign aims to connect with a global audience across various media channels. The new collection is available on DKNY.com and at select retailers.
The partnership emphasizes DKNY's connection to New York street style, aligning the brand with contemporary culture and fostering a sense of authenticity. By showcasing a diverse range of styles and modern silhouettes, the collaboration merges the brand's classic heritage with current trends to appeal to a broad audience. The campaign will be promoted through a multifaceted media approach, including social, digital, and influencer partnerships, to enhance DKNY's global visibility and market reach.
Lululemon is investing in a textile recycling project in partnership with an Australian company, Samsara Eco.
Samsara Eco has just opened its first commercial-scale plant near Canberra with an investment of A$30 million ($20 million). The facility is expected to process 1.5 million tons of plastic annually by 2030. The recycled materials will be used by Lululemon and other brands from various industries.
Samsara Eco’s proprietary technology uses artificial intelligence to create special enzymes that can break down synthetic materials that are normally considered unrecyclable. The new plant includes research labs and development spaces to help expand the range of plastics it can process. The company aimed to develop an enzyme that could address unrecyclable plastics, says Paul Riley, CEO, Samsara Eco. It continues to look at some of those harder-to-recycle plastics, he adds.
The need for new recycling technologies has become more urgent, especially after international talks in August failed to create a global treaty to limit plastic pollution. According to Gail Glazerman, Analyst, Bloomberg Intelligence, increasing regulations and changing consumer preferences are driving growth in the fiber recovery market. For example, in the Netherlands, a new law requires that 25 per cent of textile fibers used in new products must be from recycled sources.
Globally, about 60 per cent of clothing materials are plastic-based, including polyester, acrylic, and nylon, but only 9 per cent of plastics are actually recycled. Unlike traditional mechanical recycling, which requires sorting and melting, Samsara Eco’s process uses enzymes to chemically break down different types of plastic and their dyes.
Lululemon signed a 10-year agreement with Samsara in June to get access to recycled nylon and polyester, and has already used the materials in a new jacket. The brand has identified material innovation as a business opportunity, believing it can boost sales from sustainability-conscious consumers, notes Glazerman
The Clothing Manufacturers Association of India (CMAI) has warned against a potential increase in the Goods and Services Tax (GST) for higher-priced garments. According to recent reports, the GST on clothing items priced above Rs 2,500 is likely to be raised from 12 per cent to 18 per cent. CMAI opines, this move would harm the industry that is already facing challenges from recently imposed American tariffs.
CMAI states, if the GST Council sets Rs 2,500 as the threshold for the 5 per cent tax bracket and raises the rate to 18 per cent for more expensive products, it would negatively impact the growing middle class and the organized garment manufacturing sector. The association argues, 0 many products are priced higher due to the cost of raw materials and artistic handwork. Placing them in a higher tax bracket would hurt both manufacturers and consumers.
For example, essential woolen garments in North, North-East, and East India typically range from Rs 3,500 to Rs 7,000. Taxing these items at 18 per cent would make them less affordable for the middle class, CMAI points out. Similarly, wedding garments, often costing Rs 10,000 – Rs 15,000 or more, and artisan-made clothing, which is already expensive due to labor-intensive processes, would face significant price increases under the proposed tax.
The association warns, the tax hike could force parts of the industry back into the informal sector, reversing years of progress toward formalizing garment manufacturing. They emphasize, with the sector already grappling with the fallout from the US tariff war, strong domestic demand is crucial for sustaining growth and protecting livelihoods.
The association has appealed to the Prime Minister to intervene, highlighting that the garment industry is India’s second-largest employer, providing jobs to over 12 million people, many of whom are women and semi-skilled or unskilled workers.
Egypt's RMG exports increased by 26 per cent during the first seven months of the year, spanning January-July 2025. The country’s exports increased from $1.539 billion in the same period of 2025 to $1.939 billion.
Experts believe, if the current monthly growth rate of 30 per cent- 35 per cent continues, Egypt’s RMG exports could reach a record-breaking $3.7 billion by the end of the year.
Exports to Saudi Arabia rose by 97 per cent to $183 million. The country has a medium-term goal of reaching $12 billion in exports by 2031. This growth is expected to be fueled by the growth of industrial hubs, the development of new textile and garment cities in Fayoum and
An online fashion reseller, Depop launched a new multi-channel campaign on September 2 to highlight the growing importance of shopping for secondhand clothes, as per a report by Marketing Dive.
Titled, ‘Where Taste Recognizes Taste,’ the campaign features a 60-second commercial that introduces the concept of a ‘Depopelganger’ - two people from different walks of life who are brought together by their shared fashion sense. The campaign was created in collaboration with Uncommon Creative Studio.
This campaign is set to run across various platforms, including out-of-home (OOH) advertising, streaming radio on Spotify and SiriusXM, connected TV (CTV) services like Disney, Amazon, Roku, Netflix, and YouTube TV, as well as paid social media on TikTok, Meta, and Pinterest. With the growth of secondhand apparel market, the campaign aims to boost Depop’s US0 business, following other marketing initiatives launched this summer.
Founded in 2011, Depop has 43.5 million registered users. In 2021, it became a wholly-owned subsidiary of Etsy, while continuing to operate as a standalone company. The brand reported $249.6 million in general merchandise sales in the second quarter, a 35.3 per cent increase Y-o-Y, and saw a 54 per cent growth in the US during the same period.
Other brands are also capitalizing on the secondhand fashion trend. American Eagle partnered with ThredUp in 2023 to launch an online resale shop, and Heinz even collaborated with ThredUp on a fashion collection of thrifted clothes with ketchup stains.
