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India's textile industry is poised for a period of substantial growth, capitalizing on disruptions in competing markets that are opening up new opportunities for Indian exporters. This growth is expected to have a significant impact on the Indian domestic market and its supply chain, says a recent JM Financial report.
Key findings of the JM Financial Report
The JM Financial report highlights several key factors contributing to this optimistic outlook:
Shifting global landscape: Instability in key textile-producing countries like Bangladesh, grappling with political instability and logistical complexities, is prompting international buyers to explore alternative sourcing options. India, with its established textile industry and supportive government policies, is emerging as a favorable choice.
Competitive edge: The normalization of cotton and yarn prices in India, combined with a narrowing price gap between Indian and Chinese cotton, further strengthens India's competitive advantage in the global market. This price stability is crucial for Indian textile manufacturers, allowing them to offer competitive prices while maintaining healthy profit margins.
Expanding market share: India's apparel exports share in key markets like the US and the UK has steadily increased. In 2024, India holds a 7 per cent share in the US apparel import market and a 6 per cent share of the UK market, up from 6 per cent and 5 per cent respectively in 2023. This growth demonstrates India's increasing competitiveness and ability to meet the demands of international buyers.
Strategic trade agreements: The recently implemented UK-India Free Trade Agreement is expected to boost Indian textile exports by reducing trade barriers and enhancing market access. This agreement provides a significant advantage for Indian exporters, allowing them to compete more effectively in the UK market.
Red sea crisis and freight costs: The global textile industry has been facing challenges due to the Red Sea crisis, which has led to inflated freight costs and extended transportation times for shipments between the East and West. However, the report suggests increased freight costs are expected to decrease in coming months as peak season shipments ease and the Red Sea issue subsides. This anticipated reduction in freight costs will further improve margins for Indian companies.
China+1 strategy: Rising labor costs in China and the diversification of sourcing strategies by international retailers, known as the China+1 strategy, are contributing to China's declining market share in the global textile market. This shift is creating new opportunities for Indian exporters to capture a larger share of the global market.
Inventory de-stocking cycle: The end of the global inventory de-stocking cycle is expected to boost demand for textiles in the second half of the year as retailers replenish their stocks and prepare for the holiday season. This increased demand presents a favorable opportunity for Indian exporters to increase their sales and expand their market presence.
While these global disruptions pose challenges to the international textile industry, they also present significant opportunities for India. This shift in the global landscape is expected to have a profound impact on the Indian domestic market and its supply chain.
Table: Feature of the Report
|
Textile industry at a glance |
Details |
|
Market Size in 2024 |
$240.8 bn |
|
Projected Market Size in 2033 |
$475.7 bn |
|
Market Size in 2023 |
$226 bn |
|
CAGR Growth Rate |
6.84% CAGR |
|
Export Value (2023-24) |
$ 41.1 bn |
|
Global Export Ranking |
4th |
Impact on the domestic market and supply chain
The anticipated growth in the textile sector is expected to bring both benefits and challenges to the Indian domestic market and supply chain.
Increased employment: As production grows to meet rising demand, the textile sector, already the second-largest employment generating sector in India , is expected to create even more jobs, particularly in rural areas where a significant portion of the population relies on the textile industry for livelihood. This job creation will contribute to economic development and improve living standards in these regions.
Economic growth: The growth in textile exports will contribute significantly to India's foreign exchange earnings and GDP, further stimulating economic development and strengthening the country's position in the global economy.
Investment in infrastructure: Increased textile production is likely to encourage investment in infrastructure, including textile parks, manufacturing units, and logistics facilities. This investment will not only support the textile industry but also contribute to the overall development of the manufacturing sector in India.
Boost to ancillary industries: Growth in the textile sector will also benefit ancillary industries such as dyeing, printing, and textile machinery manufacturing. This ripple effect will create a positive growth cycle across various sectors of the Indian economy.
Technology upgradation: The Indian textile industry is increasingly adopting automation and advanced machinery to boost efficiency, reduce costs, and improve the precision and quality of textiles and garments. This technological upgradation is enhancing the competitiveness of Indian textile manufacturers in the global market.
E-commerce growth: The rise of e-commerce platforms in India is creating new opportunities for textile companies to reach a wider customer base, both domestically and internationally. This online expansion is opening up new markets and sales channels for Indian textile products.
Growing domestic demand: Increasing demand for premium quality clothing and footwear items within India is driving growth in the domestic textile market. This rising domestic consumption is contributing to the overall growth of the textile industry.
Potential challenges
Raw material sourcing: While India is a major cotton producer, it still relies on imports for certain types of cotton and other raw materials. Ensuring a consistent and affordable supply of raw materials will be crucial to sustain growth and avoid supply chain disruptions.
Infrastructure bottlenecks: Inadequate transportation systems, power shortages, and outdated technology in some parts of the country could hinder the efficiency of the textile manufacturing process and increase production costs. Addressing these infrastructure challenges is essential to maintain competitiveness.
Skilled labor shortage: Meeting the increased demand for skilled labor will require significant investment in training and development programs to ensure a skilled workforce for the expanding textile industry.
Sustainability concerns: The textile industry faces growing pressure to adopt sustainable practices and address environmental and social concerns, such as water pollution, waste management, and fair labor practices. Meeting these sustainability standards is crucial for long-term growth and maintaining a positive brand image.
Overall the JM Financial report paints a positive picture for the Indian textile sector. By capitalizing on the opportunities presented by global disruptions and addressing the associated challenges, India has the potential to not just replace competing markets but also capture new markets due to its competitive advantages. This growth trajectory will not only benefit the textile industry but also contribute significantly to the overall Indian economy, creating jobs, boosting exports, and driving economic development.
The Xinjiang Uygur Autonomous Region in China has long been a dominant force in the global cotton industry. Its unique combination of favorable climate conditions, vast arable land, and a skilled labor pool has enabled it to become the world's leading producer of cotton, accounting for approximately 20 per cent of global output. The region's significance to China's domestic cotton production is even more pronounced, with Xinjiang consistently contributing over 80 per cent of the nation's total cotton yield.
Cotton cultivation in Xinjiang dates back centuries, but the region's rise to prominence began in the late 20th century when the Chinese government implemented policies aimed at transforming Xinjiang into a cotton production hub. These efforts included investments in infrastructure, agricultural technology, and the expansion of cultivated land. As a result, Xinjiang's cotton output increased, contributing significantly to China's economic growth and its position as a major textile and apparel manufacturer.
Scrutiny and controversies
In recent years, Xinjiang's cotton industry has faced mounting scrutiny and challenges, particularly from the US and other Western nations. Allegations of forced labor practices within the region's cotton farms have led to import bans and sanctions on Xinjiang cotton products. These measures have disrupted supply chains and posed a significant threat to the livelihoods of millions of people in Xinjiang who depend on the cotton industry.
Despite these challenges, Xinjiang has demonstrated resilience and adaptability. The regional government has taken steps to address the allegations of forced labor, including increased transparency and monitoring of labor practices. Additionally, Xinjiang has intensified its focus on technological advancements and sustainable practices to enhance productivity and improve the quality of its cotton. For example, in 2023, Aksu Prefecture launched a pilot project to with AI-powered irrigation systems in cotton fields. The project involved the use of sensors to monitor soil moisture levels and weather conditions, which then informed an AI algorithm that controlled the irrigation system. The results of the pilot project were impressive, with a 15 per cent reduction in water consumption and a 10 per cent increase in cotton yield compared to traditional irrigation methods. This success has encouraged the wider adoption of AI-powered irrigation systems in Xinjiang.
Table: Xinjiang cotton production
|
Year |
Cotton production (mn tons) |
Share in China's total production (%) |
|
2020 |
5.2 |
87 |
|
2021 |
5.1 |
85 |
|
2022 |
5.3 |
88 |
|
2023 |
5.5 |
90 |
|
2024 |
5.68 |
92.2 |
Source: National Bureau of Statistics of China, Xinhua News Agency
Xinjiang has been at the forefront of adopting modern agricultural technologies to boost cotton production and efficiency. The region has achieved a remarkable level of mechanization in cotton farming, with nearly 100 per cent of cotton planting and over 90 per cent of harvesting now carried out by machines. This has not only increased productivity but also reduced labor requirements, mitigating concerns about labor exploitation. Also, Xinjiang has invested heavily in R&D to improve cotton varieties and cultivation techniques. The region has successfully developed high-quality, long-staple cotton varieties that are highly sought after in the global market. For example, Xinjiang Production and Construction Corps (XPCC), a state-owned enterprise that plays a crucial role in Xinjiang's cotton production has been actively involved in modernizing cotton farming practices and promoting sustainable agriculture in the region. It has also implemented measures to ensure fair labor practices and improve the livelihoods of its employees. The XPCC has been a pioneer in adopting AI-powered solutions in cotton farming. They have implemented a comprehensive AI platform that integrates data from various sources, including satellites, drones, and sensors, to optimize irrigation, fertilization, and pest control. This has led to significant improvements in resource use efficiency and cotton yield. These advancements have enabled Xinjiang to maintain its competitive edge despite the challenges it faces.
And despite facing controversies, Xinjiang cotton is used by many brands especially Chinese brands. Huafu Fashion, a leading Chinese textile manufacturer that sources a significant portion of its cotton from Xinjiang. Despite being added to the US Uyghur Forced Labor Prevention Act (UFLPA) entity list, Huafu Fashion has maintained operations and continues to export its products to various countries. The company has emphasized its commitment to ethical sourcing and transparency in its supply chain. Huafu has invested in advanced traceability systems, allowing them to track the origin of their cotton throughout the supply chain. This ensures that their products are free from any association with forced labor and meet the ethical standards of their global customers.
Therefore, Xinjiang's cotton industry remains a vital component of the global textile and apparel supply chain. While the region faces challenges related to allegations of forced labor and trade restrictions, it has shown resilience and a commitment to innovation. By embracing technological advancements, sustainable practices, and transparency, Xinjiang is striving to maintain its position as a cotton powerhouse while addressing the concerns of the international community.
In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman unveiled a series of new initiatives to boost the domestic production of technical textiles. Highlighting the importance of these specialized fabrics, used in sectors like agriculture (agro-textiles), healthcare (medical textiles), and construction (geo-textiles), Sitharaman said, the budget aims to make India a major player in this growing market.
A key component of the government’s plan involves incentivizing the adoption of modern manufacturing technologies in this segment. For this, it has exempted two new types of shuttle-less looms from import duties. This will help make these advanced machines more accessible to domestic manufacturers, driving innovation and increasing production efficiency, affirmed Sitharaman. Modernizing the manufacturing base is crucial to competing globally, she added.
Addressing the pricing dynamics of the industry, Sitharaman announced a revision to the Basic Customs Duty (BCD) on knitted fabrics. This adjustment impacts nine tariff lines, shifting from a variable rate of 10 per cent or 20 per cent to a fixed rate of 20 per cent or Rs 115 per kg, whichever is higher. This change aims to create a more predictable and stable tariff structure, which the government believes will benefit the domestic textile industry. The goal is to encourage self-reliance and promote growth by ensuring fair competition against imports.
These combined measures are expected to provide a significant boost to India's technical textile sector. By encouraging investment in advanced machinery and streamlining the tariff structure, the government hopes to foster innovation, improve product quality, and ultimately increase the global competitiveness of Indian technical textiles.
Marks & Spencer (M&S) is doubling down on its commitment to affordability by cutting prices on over 300 ‘family favorite’ products, with a focus on children's clothing. The retailer is emphasizing on its dedication to providing trusted value and everyday low prices for its 32 million customers.
The latest price reductions target over 100 items in M&S's ‘everyday essentials’ kidswear range, with savings of up to 20 per cent. Popular items like cotton-rich hoodies and joggers, as well as sweatshirts, leggings, and t-shirts, are now priced at just $7 (approximately £5.50). These price cuts will not affect the quality or high sourcing standards the brand is known for, M&S assures customers.
Alexandra Dimitriu, Director –Kidswear (Clothing & Home), M&S, explains, nowadays customers look for trusted value in their apparel purchases. More than just price, they emphasize on the product’s value and seek assurance that it is well-made, sustainable and versatile, he adds.
In its recent holiday shopping season, M&S Group sales rose by 5.6 per cent to $5.1 billion (approximately £4.064 billion). The group’ Clothing, Home & Beauty segment reported a modest 1 per cent increase in sales, reaching $1.6 billion (approximately £1.305 billion). Like-for-like sales in this category rose by 1.9 per cent, while underlying sales grew by 2.6 per cent, exceeding market growth.
President Donald Trump has revoked the long-standing $800 de minimis tariff exemption, dealing a blow to Chinese e-commerce giants like Temu, Shein, Alibaba, and JD.com. The change, part of new trade levies25 per cent on Canada and Mexico and 10 per cent on Chinaeliminates the duty-free status of small-value shipments to the US.
Previously, Chinese retailers bypassed tariffs by shipping directly to American consumers, leveraging the exemption to undercut domestic businesses. US Customs estimates that $48 billion worth of goods entered under this loophole in the first nine months of last year. The shift will likely drive up costs for bargain shoppers who relied on discount platforms.
The White House did not clarify whether the de minimis rule change applies solely to new tariffs or extends to existing levies. However, trade experts suggest it could broadly impact all Chinese, Canadian, and Mexican imports.
A senior administration official defended the move, citing lost tariff revenue and national security concerns, particularly fentanyl trafficking. Lawmakers have warned that small-value shipments make it easier to smuggle illicit substances into the US.
Temu has already begun importing goods in bulk and storing them in US warehouses to mitigate the impact, but the change threatens its discount-driven model.
Trump’s tariffs, aim to penalize China, Canada, and Mexico for allegedly failing to curb fentanyl flows and illegal immigration.
Valued at $764.4 billion in 2024, the global e-commerce apparel market is projected to reach $1.2 trillion by 2030, growing at a compound annual growth rate (CAGR) of 7.8 per cent. As per a report by ResearchAndMarkets.com, this growth will be fueled by several key factors, including shifting consumer habits, technological advancements, and adaptive business models.
Titled, ‘E-Commerce Apparel-Global Strategic Report,’ the analysis says, consumers are increasingly turning to online shopping for its convenience, speed, and vast selection. The rise of smartphones and mobile apps has made shopping anytime, anywhere, a reality. Improved internet access and secure online payment systems have further broadened the reach of e-commerce, particularly in developing markets where online shopping is becoming increasingly popular.
Combined with the affordability and ease of online shopping, the rising demand for fast fashion is a major market driver of this growth. E-commerce platforms can quickly adapt to trends, offering new collections, discounts, and flash sales, which encourages frequent purchases. The ability to access international brands online expands consumer choice, creating a global apparel marketplace. This preference for online shopping, especially among younger, tech-savvy generations, is expected to continue driving market expansion.
Technological innovations are constantly enhancing the online shopping experience. Features like AI-powered recommendations, augmented reality (AR) virtual try-ons, and streamlined checkout processes improve customer satisfaction. Data analytics help businesses optimize their supply chains and better meet consumer demand. These technological advancements ensure that e-commerce apparel brands remain competitive, contributing to the overall market growth.
Within the market, women's apparel segment is projected to grow at a CAGR of 7.7 per cent to $827.8 billion by 2030. Meanwhile, the men's apparel segment is poised to grow at a CAGR of 8.5 per cent over the forecast period.
Popular clothing retailer, H&M is introducing a new clause in its returns policy. Starting February 3, 2025, the brand will charge a $2.95 fee for return of items ordered online. This fee will be deducted from the customer's refund.
Previously, H&M loyalty members did not have to pay any return fees. However, from now, all of the brand’s customers, including loyalty members, will have to pay these new fees.
There are a few exceptions to this new though. Customers returning faulty items or items returned in H&M stores will not be charged this fee. Additionally, if customers return an item within 14 days of receiving it, they will be exempted from the return fee.
H&M says, customers can return any or all items in their order within 28 days of receiving it. If a customer chooses to return an item, H&M will refund the order value and the cost of delivery, but will deduct a return fee of $2.95. If a customer chooses to keep some items and only return part of their order, the delivery cost will not be refunded and H&M will still deduct a return fee of $2.95.
The brand will use same payment method used by the customers while placing the order to refund them. If a customer does not receive their refund within 14 days, they can contact the H&M Customer Service. For any returns made after 28 days, H&M will refund the customer via an e-Merchandise Card.
According to H&M, The new fee will help the brand offset the cost of processing returns.
French luxury goods company, Kering has sold its ‘The Mall Luxury Outlets’ business in Italy to a US real estate company, Simon Property Group.
Owner of Gucci and other luxury brands, Kering will gain approximately $365 million from the sale. The global economic slowdown in luxury spending has impacted Kering more than its competitors with the company registering declines in both sales and profits.
Earlier this month, Kering also sold a majority stake in three properties in Paris to Ardian, a French private equity firm. That deal generated net proceeds of around €837 million ($861 million).
‘The Mall’ operates two luxury outlet centers in Italy, one near Florence and the other in Sanremo. Kering described the outlet business as ‘non-core’ as it aims to reduce its involvement in outlet retail. However, Kering's brands will continue to have a presence in both Italian locations after the sale.
The American Apparel & Footwear Association (AAFA) has strongly criticized President Donald Trump’s decision to impose tariffs on all US imports from Mexico, Canada, and China, warning of severe economic fallout.
"These widespread tariffs will inject massive costs into our inflation-weary economy and risk a damaging tit-for-tat trade war," said AAFA President and CEO Steve Lamar. He stressed that the US should strengthen ties with free trade partners instead of undermining critical agreements.
Nate Herman, AAFA’s senior vice president of policy, echoed the concerns, emphasizing that businesses need tariff relief, not additional costs. "At a time of high inflation, this is a step in the wrong direction. We need to renew expiring trade preference programs and strengthen our free trade agreement with Central America to address key economic and migration challenges," he stated.
The AAFA urges the administration to pursue policies that bolster supply chains and competitiveness rather than increasing burdens on US manufacturers, farmers, and consumers.
The Istanbul Fashion Connection (IFCO) will return for its seventh edition from February 5-8, 2025, at the Istanbul Expo Center. This event, now Europe’s largest fashion fair, is set to attract over 30,000 visitors, including key international players from the fashion industry. Spanning 35,000 square meters across 8 halls, IFCO will feature over 500 exhibitors, presenting the latest trends and innovations in apparel, footwear, and accessories.
According to IHKIB Vice President Mustafa Paşahan, Turkey’s fashion industry plays a vital role in its economy, contributing to exports and job creation. As the sixth-largest global supplier and third-largest to the EU, Turkey’s fashion sector continues to expand, with its brands available in over 100 countries. IFCO serves as a platform for these brands to showcase their creativity and excellence to a global audience.
The exhibition will feature diverse segments, including womenswear, menswear, kids fashion, denim, and sustainable innovations. Notable areas include The Core Istanbul, which will host 25 leading designers such as Meltem Ozbekand Tuba Ergin, and The Fashionist area, with fashion shows and displays of high-quality evening wear. A dedicated space for Turkish lingerie and hosiery will spotlight the country’s export success in these industries.
The event also emphasizes sustainable fashion, aligning with the EU’s eco-design initiative. Visitors can explore cutting-edge sustainable designs and participate in curated matchmaking sessions to forge valuable business connections. IFCO’s extensive seminar and workshop programs will offer insights into current fashion trends, social media’s impact, and the future of fashion marketing.
With an expected 30,000 visitors, IFCO 2025 will set new standards for creativity, networking, and innovation, making it an unmissable event for fashion professionals worldwide.
