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In a significant move to stabilize India's labor-intensive textile sector, the Apparel Export Promotion Council (AEPC) has formally petitioned the Reserve Bank of India (RBI) for a specialized export policy tailored to Micro, Small, and Medium Enterprises (MSMEs). Following a high-level meeting with Sanjay Malhotra, Governor, RBI on February 16, 2026, A Sakthivel, Chairman, AEPC highlighted, inconsistent lending rates and high borrowing costs are currently eroding the global competitiveness of Indian garment manufacturers.
Demand for enhanced interest subvention and equitable credit
The council’s primary objective is to rectify the ‘uneven lending landscape’ where banks determine rates based on internal balance sheets rather than standardized export potential. A central demand includes increasing the Interest Equalization Scheme subsidy from 2.75 per cent to 5 per cent. This adjustment is viewed as vital to offset the 50 per cent tariff shocks recently encountered in the US market, which have forced many Indian exporters to absorb costs to prevent order diversion to competitors like Vietnam and Bangladesh. Furthermore, the AEPC is seeking a more inclusive credit rating system that does not disadvantage first-time exporters or small units with limited CIBIL histories.
Navigating regulatory hurdles and working capital bottlenecks
Beyond interest rates, the AEPC emphasized the operational friction MSMEs face with Authorised Dealer (AD) Banks and rigid compliance frameworks. With the Union Budget 2026–27 already expanding the export obligation period to twelve months, the industry now requires the RBI to streamline the Credit Guarantee Scheme for Exporters (CGSE) to ensure liquidity reaches the factory floor without excessive collateral demands. As the sector aims for a $100 billion export target by 2030, these policy shifts are essential for MSMEs - which represent the backbone of India's 12 per cent share in total exports - to modernize their clusters and integrate with the global Digital Product Passport (DPP) mandates starting this year.
The Apparel Export Promotion Council (AEPC) is the official body facilitating Indian garment exports to global markets, primarily the US, EU, and UAE. With ready-made garment (RMG) exports reaching $15.5 billion in 2025, the council is now prioritizing Man-Made Fibre (MMF) and technical textiles. Growth strategies focus on leveraging new FTAs and the PM MITRA mega textile parks.
The competitive landscape of global garment manufacturing is increasingly defined by environmental disclosure, with Crystal International Group emerging as a singular vanguard in 2026. Aligned with its Crystal Net Zero 2050 mandate, the Group secured a position on the CDP Climate Change A List for the third consecutive year. Standing as the only Hong Kong-based garment manufacturer to achieve this ‘Leadership Level’ status, the company is effectively leveraging high-tier environmental transparency to secure long-term partnerships with global apparel majors seeking to de-risk their own Scope 3 emission profiles.
Strategic resource management and water stewardship
Complementing its carbon management, the Group achieved an ‘A’- rating in Water Security during its debut disclosure year, placing it among the top 4 per cent of over 22,000 global participants. This recognition is underpinned by aggressive technical upgrades across its 22 facilities in Vietnam, China, Cambodia, Bangladesh, and Sri Lanka. By increasing group-wide solar PV capacity to 20 MW- a five-fold surge since 2021 - and slashing carbon intensity by 6% year-on-year, the Group is successfully decoupling industrial output from resource depletion. This operational resilience is critical as global brands prioritize suppliers who can navigate increasingly stringent water usage regulations in Southeast Asian manufacturing hubs.
Financial resilience through sustainability integration
The Group’s ‘Sustainability Vision 2030’ is delivering clear commercial dividends. For the first half of 2025, Crystal International reported a 12.4 per cent revenue increase to $1.23 billion, with net profits climbing to $98 million. This financial stability supports a high-tech transition toward a circular economy, including the implementation of blockchain-backed traceability and innovative fiber recovery. Transparency is the foundation for the radical changes our industry requires, noted a senior sustainability executive. As the sector transitions toward the EU’s 2026 Digital Product Passport mandates, Crystal’s proactive stance on environmental data provides a significant competitive moat against less-prepared regional peers.
A premier global garment manufacturer specializing in denim, intimate apparel, and sportswear. With a workforce of 79,000, the Group serves leading international brands. Growth plans focus on smart manufacturing and the ‘CSV2030’ strategy. Historically a pioneer in sustainable manufacturing, it reported $2.47 billion in revenue for FY2024.
The structural definition of ‘Made in China’ has undergone a radical transformation in 2026, transitioning from a synonym for mass production to a benchmark for AI-integrated smart manufacturing. While China remains the global leader - accounting for 21.7 per cent of the global textile market with projected 2026 revenues of $252 million in specialized segments- the narrative has shifted toward value-added technical textiles. This evolution is driven by a state-mandated push to digitalize over 70 per cent of key operations in large-scale enterprises by 2027, effectively decoupling growth from low-cost labor dependencies.
Structural sophistication and automation benchmarks
Modern Chinese apparel clusters, particularly in Zhejiang and Jiangsu provinces, are now characterized by ‘Future Factories’ that utilize 5G and industrial internet technologies. Data from early 2026 indicates, AI-driven color calibration and visual inspection have raised solid-color fabric pass rates from 50 per cent to over 90 per cent. This technical maturity allows Chinese firms to command a 63.9 per cent share of the global upper-wear market, providing complex, sensor-integrated garments that emerging manufacturing hubs in Southeast Asia cannot yet replicate at scale. The label now represents a technology hub rather than a sewing floor, noted a lead executive from a prominent Hong Kong sourcing firm.
Supply chain resilience and on-demand agility
Faced with a 30.2 per cent CAGR in domestic smart clothing and fluctuating global tariffs, Chinese manufacturers are recalibrating toward on-demand digital ecosystems. By integrating AI-driven design with automated ‘Smart Hub’ workflows, factories are reducing lead times to under 14 days for premium international retailers. To maintain global market access amidst stricter ESG mandates, over 40 leading manufacturers have adopted blockchain-backed traceability for premium fibers. This strategic move ensures compliance with the EU’s 2026 Digital Product Passport (DPP) requirements, securing China’s role as the indispensable architect of the global fashion supply chain's high-tech future.
This sector leads global output in high-performance fibers, synthetic blends, and automated garment assembly. With a 5.6 per cent CAGR projected through 2033, the industry is shifting focus to ‘New Quality Productive Forces.’ Historically the world's low-cost factory, it now prioritizes technical textiles and medical-grade wearables for North American and European markets.
The United States apparel industry has established a commanding lead in the 2026 retail landscape, recording a 9.39 per cent Y-o-Y growth in January. According to the latest CNBC/NRF Retail Monitor data, clothing and accessories stores outperformed nearly every other discretionary category. This momentum follows a record-breaking holiday season where spending grew by 4.1 per cent, signaling a robust start to the first quarter. While broader retail sales, excluding automobiles and fuel, showed a moderate monthly uptick of 0.2%, the apparel segment’s high single-digit annual growth highlights a fundamental resilience in consumer demand for soft goods.
Economic fundamentals and technological integration
This fiscal strength is underpinned by healthy household finances and consistent real wage gains, which have effectively increased purchasing power despite a 2.4 per cent annual inflation rate. To maintain these margins, retailers are increasingly deploying advanced supply chain analytics and AI-driven inventory management. These technologies allow firms to stabilize price points and ensure product availability, even as the industry faces shifting tariff landscapes. Consumer spending continues to drive the broader economy forward, states Matthew Shay, President and CEO, National Retail Federation. Retailers are leveraging new technologies to ensure products remain affordable for American families.
Strategic optimization in a value-seeking market
Despite the strong start, the sector faces a structural shift toward value-seeking behaviors. Many retailers are responding by expanding private-label assortments and optimizing physical footprints to capture high-frequency microtrends. The ‘flight to value’ remains a dominant theme, as shoppers prioritize quality and brand trust over pure volume. Successful firms are those that have streamlined operations to balance artisanal appeal with industrial scale, ensuring they remain competitive against regional peers while navigating a "low-hiring, low-firing" labor market.
The CNBC/NRF Retail Monitor is a premier data-driven platform providing real-time insights into US consumer behavior by tracking actual, anonymized credit and debit card transactions. Launched to offer a precise alternative to traditional survey-based estimates, the monitor covers nine major retail categories. It currently tracks a sector transitioning toward a $350 billion valuation by 2031, focusing on digital integration and operational efficiency within the US domestic market.
The United States apparel industry has established a commanding lead in the 2026 retail landscape, recording a 9.39 per cent Y-o-Y growth in January. According to the latest CNBC/NRF Retail Monitor data, clothing and accessories stores outperformed nearly every other discretionary category. This momentum follows a record-breaking holiday season where spending grew by 4.1 per cent, signaling a robust start to the first quarter. While broader retail sales, excluding automobiles and fuel, showed a moderate monthly uptick of 0.2%, the apparel segment’s high single-digit annual growth highlights a fundamental resilience in consumer demand for soft goods.
Economic fundamentals and technological integration
This fiscal strength is underpinned by healthy household finances and consistent real wage gains, which have effectively increased purchasing power despite a 2.4 per cent annual inflation rate. To maintain these margins, retailers are increasingly deploying advanced supply chain analytics and AI-driven inventory management. These technologies allow firms to stabilize price points and ensure product availability, even as the industry faces shifting tariff landscapes. Consumer spending continues to drive the broader economy forward, states Matthew Shay, President and CEO, National Retail Federation. Retailers are leveraging new technologies to ensure products remain affordable for American families.
Strategic optimization in a value-seeking market
Despite the strong start, the sector faces a structural shift toward value-seeking behaviors. Many retailers are responding by expanding private-label assortments and optimizing physical footprints to capture high-frequency microtrends. The ‘flight to value’ remains a dominant theme, as shoppers prioritize quality and brand trust over pure volume. Successful firms are those that have streamlined operations to balance artisanal appeal with industrial scale, ensuring they remain competitive against regional peers while navigating a "low-hiring, low-firing" labor market.
The CNBC/NRF Retail Monitor is a premier data-driven platform providing real-time insights into US consumer behavior by tracking actual, anonymized credit and debit card transactions. Launched to offer a precise alternative to traditional survey-based estimates, the monitor covers nine major retail categories. It currently tracks a sector transitioning toward a $350 billion valuation by 2031, focusing on digital integration and operational efficiency within the US domestic market. Metakeys: January 2026 retail sales, CNBC
As the February 2026 edition of White Milano commences in the Tortona district, the event marks a significant milestone with a 10 per cent Y-o-Y increase in the number of exhibiting brands. This growth reflects a broader industry trend where international designers now comprise 46 per cent of the show's roster. Amid a volatile retail climate, the fair has successfully doubled its international buyer presence, supported by the Italian Trade Agency (ITA). Significant delegations from the United States, China, and the United Arab Emirates are prioritizing the Milanese platform to secure partnerships that balance artisanal Italian heritage with modern supply chain efficiency.
Innovation in performance and technical textiles
A primary driver for the current season is the integration of high-performance materials into contemporary ready-to-wear collections. The ‘Secret Rooms’ initiative has highlighted designers like Susan Fang, whose ‘air-weave’ techniques demonstrate the increasing commercial viability of technical textiles in luxury apparel. Furthermore, the newly launched White Accessories area underscores a shift toward footwear and leather goods that utilize bio-based materials and recycled polymers. Sustainability is no longer a niche requirement but the baseline for entry into the European market, notes Brenda Bellei, CEO, M Seventy-White, during the opening roundtable.
Strengthening Middle Eastern and Asian corridors
White Milano’s parent company, M Seventy is leveraging the show’s momentum to expand into emerging markets, specifically through ‘The Circle’ in Riyadh. This strategic move aims to facilitate a two-way value exchange between European design houses and the growing Middle Eastern luxury consumer base. Simultaneously, collaborations with Chinese brand platforms are evolving from simple manufacturing outputs to co-creative models, reinforcing Milan’s position as the central nervous system of a more interconnected and resilient global textile ecosystem.
M Seventy-White operates as a premier international fashion incubator and trade platform, specializing in contemporary luxury and high-end accessories. Founded in 2002 and based in Milan, the group has launched renowned designers like Uma Wang while maintaining a strong foothold in European and Middle Eastern markets. Currently, M Seventy is executing a global expansion strategy centered on sustainable innovation and technical textile integration to achieve a target valuation of $350 billion for the broader Italian fashion ecosystem by 2031.
To be launched by the Central Board of Indirect Taxes and Customs (CBIC) on March 1, 2026, the Eligible Manufacturer-Importer (EMI) scheme allows textile manufacturers who lack formal Authorised Economic Operator (AEO) status to access duty deferral benefits for a two-year transition period. By deferring customs duties on essential raw material imports - such as specialty man-made fibers and high-end machinery - apparel exporters can optimize their working capital. Vivek Chaturvedi, Chairman, CBIC, notes, the framework utilizes advanced risk-assessment technologies to expedite cargo clearance, a move critical for the textile industry where seasonal lead times are increasingly compressed.
Bridging the compliance gap for global competitiveness For many small and medium-sized garment exporters, the rigorous audit requirements of Tier III AEO certification have historically acted as a barrier to entry. The EMI scheme serves as a strategic ‘on-ramp,’ granting these entities immediate operational advantages while they align their internal controls with international standards. This development is particularly timely as the industry aims to increase its share in the global apparel market, which is projected to reach $830 billion by 2027. The extension of advance customs rulings from three to five years further stabilizes long-term business planning, allowing manufacturers to lock in duty structures for multi-year export contracts without the risk of sudden fiscal revisions.
Strengthening logistics with technology-driven screening
The integration of machine learning into cargo screening marks a departure from traditional physical inspections, which have often delayed time-sensitive fashion shipments. A brief analysis of the Tiruppur knitwear cluster indicates that reducing customs turnaround by even 24 hours can improve the bottom line of an average exporter by 2-3 per cent. By fostering a trust-based administrative environment, the EMI scheme not only lowers transaction costs but also enhances India’s reliability as a sourcing destination. Industry stakeholders expect the draft framework to catalyze a new wave of capital investment in high-value technical textiles, as manufacturers leverage deferred duties to fund technological upgrades.
The Central Board of Indirect Taxes and Customs manages India’s customs, GST, and excise policies. By overseeing international trade gateways, the CBIC supports various industries through technology-led facilitation. Current growth plans focus on complete digitalization and trust-based compliance to improve India’s ranking in the global Ease of Doing Business index.
The federal government of Germany has launched Textile Factory 7.0 (T7), a landmark initiative in Mönchengladbach designed to transition apparel production from labor-intensive models to automated, high-margin ecosystems. Led by the Institut für Textiltechnik (ITA) at RWTH Aachen University, the facility serves as a ‘real-world laboratory’ where artificial intelligence and robotics are no longer experimental but operational. By integrating on-demand manufacturing and microfactory engineering, the project targets a drastic reduction in lead times, allowing European brands to compete with low-cost global hubs through speed and precision rather than headcount.
Regulatory compliance via DPP
The launch coincides with the 2026 rollout of the EU’s Digital Product Passport (DPP), which mandates full traceability for every garment. T7’s digital infrastructure is specifically built to automate this compliance, utilizing AI to track resource inputs and carbon footprints in real-time. As the global sustainable fashion market is projected to reach $11.78 billion this year, Germany is positioning itself as the primary exporter of the ‘Biosphere’ technology - a branch of T7 focusing on biotechnology-based materials and circular recycling systems that turn textile waste into high-quality virgin-equivalent fibers.
Economic resilience in a volatile market,
Industry data indicates, while traditional textile exports faced a 2.1 per cent contraction recently, the high-tech textile segment - including smart fabrics and bio-engineered materials - is forecast to drive a 3 per cent CAGR for the German market through 2033. The T7 project is a structural pivot,’ notes a spokesperson from the Association of the Northwest German Textile Industry. We are replacing the traditional supply chain with a networked, emission-free industrial estate that treats sustainability as a verifiable data point rather than a marketing claim. This shift is expected to generate specialized technical roles, offsetting the decline in conventional manufacturing positions.
A strategic alliance between ITA RWTH Aachen, Hochschule Niederrhein, and key regional industry associations, Textile Factory 7.0 focuses on high-value technical textiles and AI-driven apparel. The consortium manages Germany’s transition toward carbon-neutral production. Following its 2026 kick-off, the project aims to stabilize regional industrial performance, which currently contributes roughly 3.3 per cent to the global textile market revenue.
Scheduled for April 2026, the implementation of the India-UK Comprehensive Economic and Trade Agreement (CETA) is fundamentally reshaping the bilateral apparel landscape. Following the landmark women-led trade mission to London and Manchester this month, Indian exporters are moving to capitalize on the elimination of the 8-12 per cent import duties that previously hindered price competitiveness. This fiscal advantage places Indian manufacturers on equal footing with regional competitors such as Bangladesh and Vietnam. Industry forecasts suggest this tariff parity will catalyze a 30 per cent to 45 per cent growth in textile exports by 2030, as major UK retailers actively seek to diversify their supply chains away from over-reliance on single-source markets.
Sustainability and high-value specialization
The recent trade mission highlighted a critical shift toward value-added segments, including GI-tagged silks and ethically sourced handloom products. With the UK apparel import market valued at approximately $27 billion, Indian firms are targeting a market share increase from the current 6.6 per cent to over 10 per cent within 24 months. Large-scale operators like Gokaldas Exports and Arvind Ltd are expanding production capacities to meet this anticipated volume, specifically focusing on technical textiles and organic cotton. The zero-duty regime is not merely a cost-saving measure; it is a strategic entry point for high-end, sustainable Indian fashion into the British high street, noted a senior trade official during the London roundtable.
A $174 billion powerhouse and the nation’s second-largest employer, the Indian textile industry, is transitioning toward a $350 billion valuation by 2031. Key clusters in Tiruppur and Noida are prioritizing the UK as a primary growth territory for ready-made garments. Through aggressive capital investments and the adoption of the Double Contributions Convention to streamline labor costs, the sector aims to double its UK revenue to $4 billion by 2029, bolstered by a history of artisanal excellence and modern manufacturing scale.
Set to be held from June 3-5, 2026 at the Impact Center in Bangkok, the 2nd Asia Sourcing Show arrives as the textile industry maneuvers through a historic reconfiguration. With Thailand reporting the opening of 25 new textile factories in the past year alone, the event serves as a critical gateway for brands diversifying away from high-tariff zones. This ‘Bangkok Shift’ is data-backed: recent industry reports indicate, North American buyers have reduced their sourcing concentration in traditional top-three hubs from 61 per cent to 54 per cent, redirecting volume toward Southeast Asian markets that offer both technical sophistication and regional trade insulation.
Navigating the 17% tariff reality
Running concurrently, the Global Sourcing Summit 2026 will address the ‘new status quo’ where average effective tariff rates hover near 17 per cent - the highest since 1932. To remain competitive, Thai manufacturers are moving beyond volume, integrating Green Industry standards to meet the rigorous 2026 rollout of the EU’s Digital Product Passport. We are no longer competing on price wars but on innovation and verifiable sustainability, notes Dr Chanchai Sirikasemlert, Director, Thailand Textile Institute. This strategic focus targets the $11.78 billion global sustainable fashion market, utilizing AI-driven tools to automate the complex traceability now required by Western regulators.
Diversification and the multi-country sourcing model
As global supply chains lean into multi-country redundancy, the summit highlights a 42 per cent Y-o-Y rise in inspection demand across Southeast Asia. The 2026 landscape rewards ‘agile sourcing,’ where brands utilize Bangkok’s connectivity to manage on-demand manufacturing and shorten lead times. By centralizing the value chain - from yarn innovation to finished garments - the Bangkok assembly aims to stabilize regional industrial performance, which currently fuels over 3 per cent of global textile revenue, providing a resilient blueprint for a volatile trade era.
CEMS-Global is a multinational exhibition organizer specializing in high-impact B2B trade platforms across four continents. Dominating the textile and apparel sector through its ‘Textile Series,’ the company facilitates multi-country sourcing and technological exchange. With a 2026 strategy focused on emerging Asian hubs, CEMS-Global drives regional trade integration and helps manufacturers scale through direct access to international procurement executives and verified buyer networks.
