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Australia’s home textile import sector reached a valuation of $2.14 billion in 2025, maintaining a consistent growth trajectory despite global inflationary pressures. While China remains the primary supplier, accounting for approximately 58 per cent of the market share, India is rapidly narrowing the gap following the full implementation of the Economic Cooperation and Trade Agreement (ECTA).
In CY25, Indian exports of bed linen and floor coverings to Australia increased by 14.2 per cent, capitalizing on zero-duty access that provides a significant competitive edge over non-FTA partners. This regional realignment is compelling Australian procurement officers to diversify their supply chains, with a measurable shift toward high-thread-count cotton and sustainable hemp-based textiles, which saw a 22 per cent increase in import volume.
Sustainability and premiumization driving import value
The technical composition of Australian textile imports is evolving as ‘green’ regulatory requirements become more stringent. Importers are increasingly prioritizing verified recycled content and traceable fibers, a trend that has benefited specialized manufacturers in Pakistan and Vietnam. Data from the 2025 trade cycle indicates that while unit volumes remained relatively flat, the total value of imports rose by 3.4 per cent due to a broader industry move toward premiumization.
Industry analysts at the Sydney Textile Forum noted, the demand for antimicrobial and temperature-regulating fabrics is no longer a niche segment but a baseline requirement for major hospitality and residential contracts. As Australian retailers navigate a 0.8 per cent rise in logistics costs, the focus has shifted toward high-margin, durable goods that justify the increased expense of trans-Pacific freight.
Australia relies on imports for over 90 per cent of its home textile needs, with a primary focus on bed, bath, and kitchen linens. The sector is currently transitioning toward a circular economy model, with growth plans centered on 100 per cent recyclable fiber mandates by 2030. Financial performance remains stable, supported by a resilient housing and renovation market.
The Bangladesh ready-made garment (RMG) sector is facing a critical freeze in procurement as rapid shifts in United States tariff policy create a ‘wait-and-watch’ environment for major fashion retailers. Since early 2025, Bangladeshi apparel has undergone four separate duty revisions, moving from a 37 per cent reciprocal surcharge to a recently negotiated 19 per cent rate under a bilateral Agreement on Reciprocal Trade (ART). However, the implementation of a 15 per cent universal levy in late February 2026 - following a Supreme Court ruling that disrupted previous executive orders - has left the effective duty on Bangladeshi goods at approximately 31.5 per cent. This instability has triggered a slowdown in bookings for the Fall/Winter 2026 season, with industry leaders reporting that buyers are deferring commitments until duty clarity emerges.
Strategic pivot toward US-linked raw materials
A pivotal clause in the February 9, 2026, trade pact offers a potential lifeline: zero-duty access for specified volumes of garments manufactured using US-origin cotton and man-made fibers. This ‘reciprocal’ mechanism is designed to deepen supply chain integration between Washington and Dhaka but poses significant operational challenges. Bangladesh currently imports only a small fraction of its $16 billion textile input requirement from the US, relying heavily on regional suppliers like India and China. Shifting these procurement channels to qualify for duty exemptions requires a massive realignment of logistics and yarn-forward compliance. The industry is at a crossroads where the cost of raw material transition must be weighed against the benefit of market access, noted Mahbubur Rahman, Commerce Secretary.
The RMG sector is the cornerstone of Bangladesh's economy, contributing roughly 10 per cemt of GDP and accounting for over 80 per cent of total export earnings. Employing four million workers, primarily women, the industry is transitioning from basic mass-market apparel to high-value technical garments and premium knitwear. Despite 2026 trade headwinds, the sector aims for a 5 per cent annual growth rate through 2028, supported by the new PM MITRA-style industrial parks and a strategic focus on ESG-compliant manufacturing to maintain its position as the world's second-largest apparel exporter.
Scheduled to return to the iconic Bharat Mandapam in New Delhi from July 14–17, 2026, global textile extravangza, Bharat Tex 2026 positions India as the primary nexus of the global value chain, spanning everything from raw fibers and yarns to finished apparel, technical textiles, and artisanal handlooms. The 2026 edition arrives with unprecedented momentum, expecting over 5,500 exhibitors and 7,000 international buyers from more than 130 countries. With a projected turnout exceeding 130,000 visitors, the platform serves as a vital gateway for investors and brands seeking deep market entry into a sector that is a cornerstone of the Indian economy.
Navigating new trade corridors
The timing of Bharat Tex 2026 is strategically aligned with a transformative era in Indian trade policy. Following the operationalization of landmark Free Trade Agreements (FTAs) with the United Kingdom and the European Union in early 2026, alongside strengthened trade ties with the United States, India has secured zero-duty or preferential access to a combined import market worth hundreds of billions of dollars. These ‘Free Trade Corridors’ are effectively reshaping global sourcing patterns, offering international retailers a highly cost-competitive, reliable, and duty-efficient alternative to traditional manufacturing hubs. For global sourcing agencies, the event provides a definitive roadmap to capitalize on these strengthened bilateral ties and India's emerging role as a strategic production partner.
Scalable sustainability and innovation
Beyond trade volumes, Bharat Tex 2026 is a laboratory for Industry 5.0 and circularity. The event’s dedicated Sustainability and Recycling Pavilions shift the narrative from theoretical concepts to commercially viable solutions. Highlighting ‘waste-to-value’ innovations, regenerative raw materials, and traceable supply chains, the fair demonstrates how India is aligning its massive manufacturing scale with global ESG (Environmental, Social, and Governance) imperatives. This focus on ‘Scalable Sustainability’ ensures that large-scale supply chains can remain competitive while meeting the rigorous environmental regulations of Western markets.
Where strategy meets execution
The fair functions as a high-level dialogue platform, bridging the gap between policy intent and industry implementation. The Global Textile Dialogue will feature CXO roundtables, technical panels, and policy discussions aimed at achieving India’s ambitious Vision 2030 goal of $100 billion in textile exports. By integrating the Prime Minister’s 5F Vision -Farm to Fiber, Fabric, Fashion, and Foreign - Bharat Tex 2026 offers a holistic view of an ecosystem that is increasingly future-ready, resilient, and digitally integrated.
India is the world's third-largest textile exporter, supported by a vertically integrated value chain and a workforce of 45 million. The Union Budget 2026–27 has further accelerated growth through the National Fibre Scheme and PM MITRA mega-parks. Historically a leader in cotton, India is now aggressively expanding into man-made fibers and technical textiles to secure a dominant global market share by 2030.
Gildan Activewear Inc. has effectively doubled its industrial scale, with net sales rising by 31.3 per cent to $1.08 billion in Q4, FY25. This surge was primarily catalyzed by the first full month of operations following its $4.4 billion acquisition of HanesBrands Inc., finalized on December 1, 2025. By absorbing the ‘Hanes’ and ‘Bonds’ portfolios, Gildan has transitioned from a wholesale printwear specialist into a retail powerhouse, now projecting 2026 revenues between $6.0 billion and $6.2 billion. This trajectory is supported by a 10 per cent dividend hike and an upgraded synergy target, with management now expecting $250 million in annual cost savings- up from an initial $200 million estimate - by 2028.
Manufacturing synergy and portfolio realignment
To optimize its expanded footprint, Gildan has initiated a formal sale process for HanesBrands’ Australian business, aiming to utilize divestment proceeds to deleverage its balance sheet. The group is concurrently doubling down on its low-cost, vertically integrated model, with plans to break ground on a second major textile facility in Bangladesh by late 2026. This infrastructure investment is designed to support a 5 per cent CAGR in net sales through 2028. Despite a GAAP profit dip to $56.1 million due to one-time transaction costs, adjusted earnings of $0.96 per share outperformed analyst expectations. By joining forces with HanesBrands, we have achieved a scale that distinctly sets us apart in the global basic apparel market, stated Glenn Chamandy, CEO, signaling a robust outlook for the combined entity’s market share.
Founded in 1984 and headquartered in Montreal, Gildan is a leading manufacturer of basic apparel, including activewear, underwear, and socks. Following the 2025 HanesBrands acquisition, the company operates a diverse brand portfolio including Hanes, American Apparel, and Comfort Colors, targeting a $6.2 billion revenue milestone in 2026.
Urban Outfitters Inc (URBN) closed FY26 fiscal year with a record-setting $6.17 billion in net sales, an 11.1 per cent increase that underscores the success of its multi-brand diversification strategy. While its traditional retail banners showed steady momentum, the standout performer was Nuuly, the group’s apparel subscription service. Nuuly’s annual revenue increased by 50.2 per cent to $568 million, surpassing internal targets and officially transitioning from a high-growth startup to a core contributor representing 10 per cent of total group turnover. This shift toward a circular fashion economy has proven a critical buffer against the promotional volatility currently impacting the broader apparel sector, as average active subscribers jumped 45 per cent Y-o-Y.
Operational discipline and sourcing resilience
Despite a 12.8 per cent increase in inventory levels and persistent tariff headwinds, URBN achieved a 126-basis-point expansion in its full-year gross profit margin, which reached a record $2.22 billion. This profitability was engineered through a rigorous ‘regular price’ selling strategy and a reduction in markdown activity, particularly within the Anthropologie and Free People banners. The company is actively mitigating trade pressures - estimated at a 75-basis-point drag- by reconfiguring its sourcing geography and optimizing transportation logistics. Management’s capital allocation remains aggressive, with $270 million earmarked for 2026 to fund 69 new store openings, including a fleet of ‘Gen Z-friendly’ format stores designed to recapture younger demographics through immersive, modular retail environments.
Headquartered in Philadelphia and founded in 1970, URBN operates a lifestyle portfolio including Urban Outfitters, Anthropologie, Free People, and Nuuly. With a 2026 net income of $464.9 million, the group is focused on 5.9 per cent annual earnings growth and achieving a 60 per cent responsibly sourced material target by 2027.
German sportswear giant Puma SE has officially designated 2026 as a ‘transition year,’ forecasting an operating loss (EBIT) between €50 million and €150 million as it executes a massive operational restructuring. Under Arthur Hoeld, CEO, the brand is navigating the second phase of its ‘Reset’ plan, aimed at purging excess inventory and exiting ‘undesirable’ wholesale channels that have historically eroded brand equity. This strategy resulted in a reported 13.1 per cent revenue decline to €7.3 billion in 2025, primarily driven by aggressive product ‘take-backs’ from North American mass merchants and a deliberate reduction in promotional activity. Despite the projected deficit, management has earmarked €200 million in capital expenditures to fortify direct-to-consumer (DTC) infrastructure and digital capabilities.
Consolidation and the Anta partnership
The company's turnaround efforts are being boosted by a significant shift in its ownership structure. China’s Anta Sports recently acquired a 29.1 per cent stake for €1.5 billion, effectively replacing the Pinault family’s Artemis as the largest shareholder. While Puma maintains its independent governance as a German-listed entity, the partnership provides a strategic buffer against geopolitical trade volatility and enhances its footprint in the critical Greater China market.
The restructuring also includes a global workforce reduction of approximately 1,400 corporate roles and a pivot toward higher-margin licensing models for core North American categories. By streamlining operations and sharpening its focus on ‘DNA categories’ like football and running, Puma aims to stabilize its margins by late 2026, setting the stage for a return to profitable, above-industry growth in 2027.
Founded in 1948 in Herzogenaurach, Puma is a global leader in performance footwear and lifestyle apparel, with a presence in over 120 countries. Its current "Vision 2028" strategy focuses on reclaiming a top-three global market position by leveraging its deep roots in football, motorsports, and high-performance running technology.
The European nonwoven sector is entering a period of heightened regulatory tension as Edana, the international industry association, flags a significant mismatch between observed market volumes and official customs data. Market intelligence suggests, imports of specific PET spunbond and staple fiber products ranged between 15,000 and 30,000 metric tons annually over the last two years. However, official records under the designated CN codes 5603 14 20 and 5603 94 20 show volumes substantially below these estimates. This statistical gap suggests a widespread pattern of misclassification, often attributed to importers using outdated codes out of habit or failing to adapt to the Combined Nomenclature updates introduced in 2024.
Regulatory enforcement and anti-dumping implications
The push for accurate classification is increasingly urgent as certain polyester products from China remain under an active EU anti-dumping investigation. Since December 2025, imports of non-woven needle-punched polyester sheets- specifically those weighing over 70 g/sq m with binder impregnation - have been subject to mandatory registration. Jacques Prigneaux, Edana emphasizes, accurate reporting is not merely a statistical requirement but a legal safeguard for the domestic industry. Misclassification can obscure the true impact of dumped goods on the European market, prompting Edana to request enhanced import checks from the European Commission and national customs authorities across EU member states.
Legal risks and commercial compliance
For importers, the consequences of continued reporting errors are transitioning from administrative oversight to severe legal liability. Customs authorities are increasingly applying additional duties, administrative fines, and criminal penalties for inaccurate filings. This is particularly critical for goods under preferential trade regimes or those subject to special regulatory control. The association is currently conducting an outreach initiative to ensure supply chains and customs agents are updated on the specific TARIC and CN codes required for compliance. Failure to align internal databases with current EU rules could result in unforeseen financial burdens and disrupted logistics for firms operating within the European synthetic cluster.
Established in 1971, Edana serves as the global voice for the nonwovens industry, representing over 260 member companies across the value chain. The association focuses on technical standardization, regulatory advocacy, and sustainability within the hygiene, medical, and industrial textile sectors. Historically a key partner to the World Customs Organisation, Edana’s current growth plan involves intensifying market monitoring and supporting responsible product stewardship amidst evolving global trade dynamics and technical challenges.
China’s premier athletic giant, Anta Sports has altered its global trajectory by inaugurating its first North American flagship in Beverly Hills on February 13, 2026. This 3,000-sq-ft ‘brand hub’ signals a decisive transition from distributor-led exports to a high-margin direct-to-consumer (DTC) model. By bypassing traditional wholesalers, Anta aims to directly manage its narrative in the world's most competitive sportswear market. The move is strategically timed with the 2026 NBA All-Star Weekend, leveraging a newly signed lifetime partnership with NBA star Klay Thompson to anchor its presence alongside industry incumbents like Nike and Adidas.
Global multi-brand synergy
The expansion follows a robust fiscal 2025 performance, where the group reported record interim revenue of RMB 38.54 billion, a 14.3 per cent Y-o-Y increase. Anta's aggressive globalization is further fortified by its recent €1.5 billion acquisition of a 29 per cent stake in Puma, creating a powerful multi-brand ecosystem that includes Amer Sports (Arc’teryx, Salomon) and Fila. This flagship is a window into Chinese innovation, states Samuel Tsui, CEO, Anta Brand. Despite navigating potential geopolitical trade sensitivities and high SG&A investments, the brand is capitalizing on a 60 per cent sales growth in its outdoor and niche categories. By integrating community-centric programming like run clubs and athlete-led workshops, Anta is positioning itself as a cultural lifestyle destination rather than a mere hardware retailer.
Founded in 1991, Anta is the world's third-largest sportswear company by revenue, operating over 12,000 stores in China. Specializing in high-performance basketball, running, and technical apparel, the group targets dominant global market share by 2030, supported by an annual R&D investment exceeding RMB 1 billion and a 2026 revenue target nearing $10 billion.
By 2025, the EU overtook the US as the largest destination for China’s low-value e-commerce exports, highlighting a decisive rerouting of digital fashion flows. For Shein to Temu, the shift showcased more than a mere geographical reallocation, it marked a recalibration in the face of growing trade barriers and a changing global appetite for low-cost fashion.
The great re-routing
The catalyst for this change was Washington’s aggressive trade policy. In early 2025, the US intensified regulatory scrutiny around the de minimis threshold, formally codified under Section 321. This provision had previously allowed packages valued under $800 to enter the US duty-free, offering Chinese exporters a substantial advantage in the high-volume, low-value fashion segment. By August, the suspension of duty-free treatment for these parcels fundamentally altered the economics of international fashion trade, forcing a reevaluation of global sourcing and distribution strategies.
The immediate impact on US imports was swift and measurable. Chinese exporters faced new duties ranging from 15 to 50 per cent on small parcels, directly squeezing margins on items historically priced for impulse purchases. Consumer-facing platforms, in turn, raised prices by 10-30 per cent in April 2025 to offset the rising operational costs. For Shein, the impact were tangible: its US market share declined for the first time since 2021, falling from 1.8 per cent in 2024 to 1.7 per cent in 2025, while total sales value dropped 4.5 per cent.
Europe steps into the spotlight
As the American market grew increasingly inhospitable, Chinese fast-fashion giants executed a digital shift toward Europe. Advertising spend rose, with French campaigns up 45 per cent and the UK seeing a 100 per cent increase in digital media allocations. The results were pronounced: Shein recorded double-digit growth in retail sales across the EU, with France growing 26.7 per cent, Germany 31 per cent, and Spain 26.6 per cent.
Hungary and Denmark emerged as unexpected growth engines, recording user engagement jumps of up to 400 per cent, highlighting the potency of a digitally savvy, smaller-market European segment. Platforms responded strategically, with AliExpress leading at 190 million users and Shein following closely with 145.7 million monthly users. In contrast, the US market stagnated, with Temu and Shein collectively capturing just 17 per cent of the discount fashion market amid declining parcel volumes.
Table: Market dynamics: EU vs. US (2025)
|
Metric |
EU |
US |
|
Status |
Largest market for low-value e-commerce |
Declining volume due to trade barriers |
|
User Growth |
Shein: 145.7M monthly users (+11.6%) |
Shein: Sales value decline of 4.5% |
|
Top Growth Hubs |
Hungary & Denmark (400% jump) |
12.6% decline in low-value exports |
|
Platform Lead |
AliExpress (190M users), Shein (145.7M) |
Temu & Shein (17% of discount market) |
|
Consumer Spend |
UK: €2.3B revenue (+32% YoY) |
$238B online fashion spend (stagnant) |
The manufacturer’s perspective: From Panyu to Paris
Bob Liu, a footwear manufacturer based in Fujian province, embodies the industrial dimension of this pivot. Liu’s factory historically relied on the US for 80 per cent of its total orders, producing small parcels tailored to American sizing and style. By early 2026, the US share of his revenue had dropped to less than half, while Europe now accounts for nearly 40 per cent of his output. Europe is increasing, increasing, increasing, Liu told The Wall Street Journal.
Factories in Panyu and other Chinese fast-fashion villages have responded by realigning production lines to European sizing and tastes, developing what Liu describes as ‘Euro-chic’ designs. These adaptations are more than cosmetic; they represent a full-scale operational pivot, including sourcing materials locally where possible and optimizing logistics for regional fulfillment.
EU customs reform a coming impediment
The European boom, however, faces a new inflection point. On July 1, 2026, the EU Council will implement a landmark customs reform, aiming to level the playing field and curb the environmental and economic impact of millions of small parcels. The changes are straightforward but consequential:
• The longstanding €150 threshold for low-value consignments will be abolished.
• A flat €3 duty will apply to small parcels (under €150) sold by non-EU sellers registered under the Import One-Stop Shop (IOSS).
• The duty will be applied per item category. A parcel containing a shirt and a pair of shoes, for example, will attract a total €6 charge.
This reform has prompted platforms to rethink logistics. Temu and Shein are reportedly relocating 20-50 per cent of their inventory to domestic European warehouses, ensuring rapid delivery while mitigating the per-package duty impact. Localized fulfillment, once a luxury, is now a strategic imperative.
Lessons for India
While Europe and the US battle over Chinese imports, Indian manufacturers are closely monitoring these developments. India continues to be a critical sourcing hub for global apparel, yet there is growing concern about dumping, as goods displaced from the US market seek new outlets in Europe. The comparative advantage of Indian textile production vertical integration from cotton to garment, positions the industry to capture demand if Chinese imports face barriers, but challenges remain, including energy costs and logistics constraints.
Table: Comparative labor & trade dynamics
|
Feature |
India |
Bangladesh |
Vietnam |
China (fast fashion) |
|
Primary Advantage |
Vertical integration (Cotton to Garment) |
LDC Duty-Free access to EU |
High efficiency, FTAs (CPTPP) |
Speed-to-market, AI-supply chains |
|
Labor Cost |
Moderate |
Very Low |
Moderate |
Rising |
|
Key Challenge |
High power costs & logistics |
Political stability & energy |
Sourcing raw materials |
US Trade Barriers/Tariffs |
Preparing for volatility
As 2026 unfolds, the fashion industry faces a time of reckoning. According to McKinsey’s State of Fashion 2026, growth in fast fashion will remain in low single digits, with profit margins increasingly tied to supply chain agility. Companies that can pivot production between regions in response to policy shifts, environmental considerations, or consumer trends will outperform those wedded to a single market or distribution channel. For Shein, Temu, and the broader digital fashion ecosystem, the lesson is clear: survival is no longer about volume alone; it is about speed, adaptability, and strategic localization.
In coming years, Europe is no longer just a market, it is the lab for the next era of fast fashion. The winners will be those who combine digital reach with nimble, regionally attuned supply chains, while the losers risk repeating the American market’s costly missteps.
The high-performance footwear market is witnessing a tectonic shift as On Running operationalizes its state-of-the-art robotic assembly facility in Busan, South Korea. This move represents a strategic departure from traditional labor-intensive Asian manufacturing hubs. By deploying proprietary robotic units, the brand aims to drastically shorten lead times, which typically span several months in the conventional footwear supply chain.
The Busan facility serves as a blueprint for planned regional hubs in North America and Europe, allowing the company to move production closer to its primary consumption centers. This ‘nearshoring’ strategy is designed to mitigate the high freight costs and port congestion that have historically hampered the inventory turnover of premium sportswear brands.
Navigating tariffs and supply chain resilience
In an era defined by escalating trade protectionism and geopolitical instability, the transition to automated localized manufacturing offers a critical buffer. With the US government maintaining a hardline stance on footwear tariffs, On Running’s decentralized model provides a structural advantage over competitors reliant on centralized Southeast Asian production.
Industry analysts estimate, localized robotic production could reduce shipping-related carbon emissions by up to 30 per cent, aligning the brand with tightening ESG mandates in the European Union. Our investment in automation is a direct response to the need for speed and localized resilience, noted a company spokesperson. By utilizing localized ‘Speedfactories,’ the brand can react to consumer trends in real-time, effectively reducing the risk of overstocking and seasonal markdowns that often erode margins in the retail sector.
Strategic footprint and market trajectory
Founded in Zurich in 2010, On Running specializes in premium performance footwear and apparel featuring its signature CloudTec technology. The company primarily targets the North American and European markets, where it has seen triple-digit growth in its direct-to-consumer channel. With a 2026 revenue target exceeding $3.5 billion, On continues to expand its retail footprint through flagship stores in major global cities while maintaining a robust presence in specialty running outlets.
