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In a strategic bid to shift the state’s industrial core toward high-value manufacturing, the Tamil Nadu Interim Budget 2026–27 has earmarked Rs 1,943 crore for the Handlooms and Textiles Department. Presented in February 2026, this fiscal roadmap prioritizes the ‘sports and performance’ segment, signaling an exit from traditional low-margin spinning. The Tiruppur Exporters’ Association (TEA) has hailed the move as a critical intervention to secure the region’s dominance in the global athleisure market, currently projected to expand at a 14.5 per cent CAGR through 2030.
Institutionalizing performance standards
A cornerstone of the budget is the Rs 6 crore allocation for an Advanced Quality Testing Laboratory at the South India Textile Research Association (SITRA) in Coimbatore. This facility is engineered to de-risk the export of medical and sports-grade fabrics by providing indigenous certification, bypassing the need for expensive overseas testing. For the $145 billion Indian textile industry, where Tamil Nadu holds a one-third share, this infrastructure is essential for competing against regional rivals like Vietnam. This laboratory is a game-changer for Tiruppur’s technical garment units, states KM Subramanian, President, TEA, noting, localized testing will accelerate speed-to-market for high-performance apparel.
Energy security and export resilience
The budget also introduces an Rs 18,091 crore Integrated Renewable Energy Policy, aimed at slashing the ‘power-per-garment’ cost for the state’s 3,200 knitwear units. This energy security is paired with a favorable trade climate following the US-India tariff rollback to 18 per cent in early February. By integrating captive renewable power, manufacturers are insulating themselves against the volatility of the global cotton trade. As the PM MITRA Park in Virudhunagar nears its September 2026 completion, the state is positioning its textile clusters to transition into ‘intelligent factories’ capable of sustaining the double-digit export growth required for Tamil Nadu’s $1 trillion GDP objective by 2031.
The Tiruppur Exporters’ Association is the premier body representing India’s ‘Knittown,’ accounting for 55 per cent of the country’s cotton knitwear exports. Serving over 3,200 manufacturers, TEA’s 2026 vision focuses on doubling annual exports to Rs 30,000 crore by leveraging the India-US trade framework. Originally established in 1990, the association now drives industry-wide modernization through sustainable energy adoption and large-scale worker housing initiatives.
Moving beyond the era of ephemeral marketing, Lacoste has inaugurated its first permanent Café Lacoste in the heart of Paris on Avenue Franklin D. Roosevelt. Launched in February 2026, the 100-sq-m gourmet destination marks a strategic shift for the ‘Crocodile,’ transitioning from seasonal pop-ups to a dedicated ‘living space’ designed to drive multi-sensory brand engagement and long-term retail loyalty.
Monetizing the ‘Art de Vivre’
Developed in collaboration with the Giraudi Group, the 65-seat venue translates Lacoste’s tennis heritage into a physical environment featuring deep green, off-white, and terracotta tones. The initiative is a direct response to the ‘experience economy,’ where 74 per cent of consumers now signal a willingness to pay a premium for brands that offer fully integrated lifestyle narratives.
Curated by Chef Thierry Paludetto, the menu features signature ‘Iconic Polo’ desserts and a revival of ‘Le Chose’ - a cocktail originally invented by René Lacoste in 1967. By merging culinary excellence with exclusive retail drops, Lacoste is tapping into the global café market, currently growing at a 6.2 per cent CAGR, to expand margins amidst low single-digit growth in traditional apparel segments.
Hybrid commerce and data capture
The Paris flagship café functions as a hybrid commerce hub, integrating a concept store that sells exclusive Lacoste-branded French porcelain and dedicated textile capsules. This ‘Perceptive Retail’ model allows the brand to capture high-intent consumer data outside the traditional fitting room. We are extending our universe into shared spaces that reflect our cultural heritage, states Éric Vallat, CEO, Lacoste. This strategy mirrors the success of Ralph’s Coffee and Café Kitsuné, providing a buffer against 2026’s macroeconomic volatility. By embedding the brand into the ‘daily urban rhythm’ of consumers, Lacoste aims to convert foot traffic into a traceable community, utilizing the venue as a physical touchpoint for its Durable Elegance sustainability and loyalty programs.
Lacoste is a global French lifestyle brand specializing in premium sportswear and accessories. Following a successful 2025 pilot in Monaco, the brand is expanding into permanent hospitality to enhance its ‘Art de Vivre’ positioning. Targeting key markets in Europe and North America, Lacoste aims to leverage these hybrid spaces to drive omnichannel growth and maintain its status as a leading cultural icon in the $440 billion global luxury goods market.
The February 2026 edition of Première Vision Paris has concluded with a decisive shift toward ‘localized industrialism,’ marking a departure from the generic globalized sourcing models of the past decade. Hosting approximately 1,000 international exhibitors at Paris Nord Villepinte, the summit focused on three specific ‘Territories of Savoir-Faire’ - France, Portugal, and Japan - to illustrate how regional craftsmanship can meet the stringent traceability requirements of the upcoming EU Digital Product Passport (DPP).
Engineering high-value supply chains
For the €1 trillion global textile ecosystem, the 2026 show emphasized ‘specification-driven’ aesthetics. Portugal emerged as a strategic hub for integrated production, while Japan showcased biotechnological breakthroughs in regenerative natural fibers. These innovations are critical as the industry faces a 3 per cent yield decline in traditional cotton belts, forcing a transition toward climate-adaptive materials. Craftsmanship is no longer a legacy concept; it is a measurable performance metric, noted Florence Rousson, President, Première Vision Management Board. This sentiment is backed by market data forecasting a 14 per cent growth in demand for high-integrity ornamental surfaces over the next 12 months.
Navigating the 2026 compliance landscape
The retail sector is currently navigating a ‘compliance cliff,’ as the EU's ban on destroying unsold textiles takes full effect for large enterprises in 2026. This regulatory pressure has accelerated the adoption of low-impact dyeing and circular design frameworks, which were central to the show’s ‘Smart Creation’ area. With consumer demand for sustainable apparel now exceeding 70 per cent, exhibitors demonstrated that high-performance fibers—such as bio-based hemp and recycled polyester - can reduce per-garment carbon intensity by up to 30 per cent. This shift provides a necessary hedge against the low single-digit growth projected for the global fashion industry in the 2026 fiscal year.
Première Vision is the world’s leading trade exhibition for fashion professionals, specializing in fabrics, yarns, leather, and manufacturing. With bi-annual editions in Paris attracting 34,000+ visitors, the organization facilitates billions in international trade. Its 2026 strategy emphasizes the ‘Open’ theme, integrating predictive AI and sustainable innovation to drive long-term economic resilience across 120 nations.
The signing of the Bangladesh-Japan Economic Partnership Agreement (EPA) on February 6, 2026, marks a transformative moment for South Asia’s textile and apparel corridor. While India has operated under a similar bilateral framework since 2011, Bangladesh’s latest deal is being widely recognized as a more agile and commercially intelligent architecture. Unlike previous pacts, this agreement is designed not merely to preserve Bangladesh’s export base as it approaches graduation from Least Developed Country (LDC) status. Instead, it positions Dhaka to aggressively capture market share from China, aiming to become Japan’s leading high-volume apparel sourcing partner.
Redefining Rules of Origin
The critical differentiator between India and Bangladesh lies in Rules of Origin (RoO). India’s 2011 Comprehensive Economic Partnership Agreement (CEPA) with Japan has largely underperformed in apparel due to its double-stage transformation requirement both the fabric and garment must be domestically produced for duty-free eligibility. This restriction has historically constrained India’s ability to compete effectively in Japan’s high-volume apparel market.
Bangladesh’s 2026 EPA, by contrast, introduces a Single-Stage Transformation rule. This enables Bangladeshi factories to import high-quality yarns or synthetic fabrics from global leaders including Japan, China, and Korea and still qualify for duty-free exports after local garment production. This effectively eliminates the fabric bottleneck that has hindered India, providing Dhaka with a significant competitive advantage.
India vs Bangladesh in the Japanese market
Despite India’s vertically integrated textile ecosystem, spanning cotton cultivation to finished garment, the country has failed to convert this advantage into Japanese market dominance. Bangladesh, though more reliant on imported raw materials, has captured nearly four times the export value of India in this corridor.
Table: Apparel & textile exports to Japan (2025-26)
|
Apparel/Textile trade |
India (CEPA since 2011) |
Bangladesh (EPA 2026) |
|
Current Export Value (Japan) |
$354 mn (2024) |
$1.41 bn (FY25) |
|
Apparel Market Share in Japan |
1.20% |
5.50% |
|
Projected 2030 Market Share |
2.50% |
10.00% |
|
Primary Fiber Base |
80% cotton |
33% synthetic/MMF shift |
|
Inbound Japan FDI (Textiles) |
$45 mn (annual) |
$250 mn (projected) |
The figures reveal Bangladesh’s rapid growth despite lower domestic fiber production. While India relies heavily on cotton, Bangladesh’s shift to man-made fibers (MMF) and the flexibility of importing high-performance fabrics gives it a clear edge in the Japanese premium and technical apparel segments. The projected inflow of Japanese FDI underscores Tokyo’s confidence in Bangladesh’s ecosystem.
Capturing the China Plus One opportunity
Bangladesh’s timing is propitious. Japanese retailers such as Fast Retailing (Uniqlo) and Adastria are actively diversifying away from China in search of alternative sourcing partners. China’s share of Japan’s apparel imports fell from 55 per cent to 46 per cent in 2025, while Bangladesh recorded 17.2 per cent year-on-year growth in Q1 2025 alone.
One important factor in this momentum is the Bangladesh Specialized Economic Zone (BSEZ) in Araihazar, which provides a Japan-standard ecosystem. Unlike India’s fragmented textile clusters, BSEZ hosts Japanese companies such as Sumitomo Corporation and NICCA Chemical, offering cutting-edge dyes, machinery, and compliance frameworks aligned with Tokyo’s stringent quality benchmarks.
High-tech synthetics at Araihazar
A Dhaka-based apparel manufacturer recently partnered with NICCA Chemical to establish a high-speed production line for technical outerwear within BSEZ. Previously, importing Japanese-developed synthetic waterproof fabrics would have incurred a 10 per cent duty upon re-export to Japan. Under the new EPA, this circular supply chain is entirely duty-free.
This policy change has lowered landed costs for Japanese retailers by 12 per cent, making Bangladesh more price-competitive than Vietnam in the premium synthetic segment. Analysts see this as a potential blueprint for scaling high-value exports in other functional wear categories.
From volume to value
The textile and apparel sector remains Bangladesh’s economic backbone, contributing over 80 per cent of total export earnings and approximately 10 per cent of GDP. Today, the country is the world’s second-largest apparel exporter, but its strategy is shifting from sheer volume to value-led growth, emphasizing man-made fibers, functional garments, and premium segments. Environmental compliance and automation are central to this evolution. With over 200 LEED-certified factories, the highest concentration globally Bangladesh is attracting international retailers seeking sustainable, high-tech production. By 2035, the industry aims to reach $100 billion in annual exports, leveraging vertical integration, automation, and aggressive market diversification.
A new regional hierarchy in apparel trade
Bangladesh’s 2026 EPA with Japan illustrates the power of trade architecture over raw resource endowment. By combining single-stage flexibility, specialized zones, high-tech partnerships, and sustainability, Dhaka is emerging as a formidable competitor in East Asia’s apparel market. For India, the lesson is clear: supply chain control alone is insufficient. Future competitiveness will depend on regulatory flexibility, strategic zone development, and alignment with buyer requirements a framework Bangladesh has now perfected.
A massive multi-agency enforcement operation in Newcastle has exposed a significant ‘compliance gap’ within the regional textile sector, sending shockwaves through the broader retail landscape. Executed in early February 2026, the raids on approximately 12 garment manufacturers uncovered severe labor law violations, including the employment of dozens of undocumented workers and hazardous factory conditions that posed immediate fire risks.
The retail accountability crisis
The fallout has been immediate for major retail chains, as investigators discovered large quantities of finished apparel labeled for high-profile brands. While these retailers have historically relied on third-party audits, the Newcastle probe suggests that ‘staged compliance’ fronts are becoming increasingly sophisticated. Industry data indicates, the UK textile sector faces a £4 billion productivity loss annually due to such illicit activities and labor vacancies. Deputy Minister Alexandra Abrahams emphasized that industrial growth cannot be predicated on illegality, calling for ‘meaningful due diligence’ rather than just reliance on administrative oversight.
Tech-driven deterrence and resilience
To combat the rise of these ‘shadow factories,’ the industry is accelerating the adoption of Digital Product Passports (DPP) and blockchain-based traceability. Under the UK Textiles Pact Roadmap 2026-2030, manufacturers are now required to align with eight new circularity indicators to ensure ethical labor standards. This shift is critical as the domestic market enters a bullish period, with orders rising by 20 per cent, yet recruitment intentions are faltering due to rising employment costs. By integrating AI-driven demand forecasting and RFID tracking, compliant manufacturers aim to out-compete illicit operators, securing a supply chain that prioritizes human rights over predatory margins.
Newcastle serves as a historic hub for the clothing and textile value chain, specializing in fast-fashion apparel and technical uniforms. Currently, the region is undergoing a transition toward circular manufacturing under the R-CTFL Masterplan. Despite a 0.5 per cent growth forecast for 2026, the sector faces challenges from non-compliant entities that distort competition and undermine the integrity of the £64 billion domestic textile shipments. The enforcement actions highlight a systemic shift toward mandatory transparency as the UK pushes for a more resilient and ethical manufacturing base.
In a move that formalizes the intersection of Big Tech and regenerative agriculture, Microsoft has signed a landmark offtake agreement with the Indian climate-tech firm Varaha to purchase over 100,000 tons of carbon dioxide removal (CDR) credits. Announced in early 2026, the deal leverages Microsoft’s AI infrastructure to transform the economics of smallholder cotton farming across Maharashtra and Rajasthan.
Biochar integration and carbon monetization
The partnership centers on the deployment of 18 industrial biomass gasification reactors that convert cotton stalks - traditionally agricultural waste often disposed of via open-field burning—into biochar. This charcoal-like substance serves as a stable carbon sink, locking biogenic carbon into the soil for centuries. For India’s textile sector, which contributes to nearly 25 per cent of the world's cotton production, this creates a dual-revenue stream. Farmers now receive direct payments for their biomass while benefiting from the enhanced soil moisture retention and reduced fertilizer requirements that biochar application provides.
AI-enabled supply chain traceability
Beyond carbon sequestration, the initiative utilizes Microsoft’s Azure Data Manager for Agriculture to provide high-fidelity traceability. By using satellite imagery and machine learning to verify regenerative practices at the field level, the project ensures that the resulting fiber meets the ‘contamination-free’ and ‘traceable’ standards required by global luxury retailers. This technical scaffolding is essential as the industry navigates a 3 per cent yield drop caused by uneven monsoons in the 2025/26 season. High-integrity carbon removal is now a material catalyst for rural economic resilience, states Madhur Jain, CEO, Varaha. By monetizing environmental stewardship, the deal offers a buffer against the volatility of global cotton prices, which currently sit 16 per cent below government support levels.
Varaha is a leading South Asian climate-tech developer specializing in nature-based carbon removal. Operating across India, Nepal, and Bangladesh, the firm connects over 45,000 smallholder farmers to global carbon markets. Through its proprietary tech stack, Varaha focuses on biochar, agroforestry, and regenerative cotton, aiming to remove 2 million tons of CO2 over the next decade while boosting farm-level profitability.
In a significant move to formalize sustainability in the apparel sector, the Denim Deal initiative has appointed Green Story, an AI-first sustainability platform, as its strategic intelligence partner. Announced in February 2026, this collaboration aims to move the denim industry beyond fragmented pilot projects toward a standardized, data-backed circular economy. With the global denim market projected to reach $95 billion by 2030, the partnership addresses the critical need for "audit-ready" environmental metrics.
Translating ambition into measurable outcomes
The primary objective of this alliance is to expand the use of Post-Consumer Recycled (POCR) cotton. Green Story will provide the foundational data for the Denim Deal’s 2026 annual report, utilizing advanced Life Cycle Assessment (LCA) tools to quantify the impact of recycled fibers. This technical scaffolding is essential for brands navigating the $2.3 billion sustainable jeans market, where regulatory pressure from the EU’s upcoming Digital Product Passport (DPP) mandates is intensifying. ‘We are removing the myth that recycled content compromises quality or increases costs by providing robust, comparable data,’ stated an initiative spokesperson.
Bridging the compliance and bandwidth gap
To support small and medium-sized enterprises (SMEs), the partnership introduces a ‘bolt-on’ sustainability function. This semi-autonomous package allows retail brands to conduct circularity assessments and identify supply chain gaps without the overhead of large internal ESG teams. By integrating these metrics directly into consumer-facing platforms, brands can leverage Digital Product Passports to drive transparency. Early data suggests, next-generation denim - utilizing ozone finishing and 20 per cent POCR fiber - can reduce water consumption by up to 67 per cent, providing a clear competitive advantage in a retail landscape increasingly defined by ‘athleisure-luxe’ and ethical durability.
Green Story is an AI-driven platform providing LCA data and Digital Product Passports for the fashion industry. The Denim Deal is a global alliance of brands and manufacturers, including MUD Jeans and Scotch & Soda, committed to using at least 5 per cent recycled textile across all garments. Together, they aim to produce 3 million circular jeans by late 2026, targeting major markets in Europe, India, and North America.
The legendary denim label Wrangler has officially expanded its high-performance portfolio by introducing women’s riding jeans reinforced with Dyneema, the world’s strongest fiber. This strategic move, announced in early 2026, represents a significant evolution in the $100 billion global denim market, where consumer demand is shifting from fast-fashion aesthetics toward long-cycle durability and ‘athleisure-luxe’ functionality.
Engineering the ‘Unbreakable’ silhouette
By weaving ultra-high-molecular-weight polyethylene (UHMWPE) into a soft cotton blend, Wrangler has engineered a textile that is 15 times stronger than steel yet light enough to float on water. Featuring the Skylar High Rise Relaxed and Rodeo High Rise Boot styles, this new collection targets a growing demographic of female outdoor enthusiasts and equestrian riders. This technical integration addresses a critical gap in women’s retail: the need for apparel that survives high-abrasion environments without sacrificing comfort. Material science is the new frontier for Western authenticity, noted a market analyst during the launch.
Market dynamics and economic viability
As parent company Kontoor Brands targets record-breaking revenue in 2026, the adoption of premium fibers like Dyneema - which is projected to reach a $5.96 billion valuation by 2032—is a clear play for market premiumization. While conventional denim production faces scrutiny for environmental impact, Dyneema’s extreme durability supports circularity by extending garment lifespans. This focus on "specification-driven uptake" allows Wrangler to maintain high margins despite global inflationary pressures, securing a competitive edge in a sector where men’s denim still traditionally dominates revenue.
A subsidiary of Kontoor Brands, Wrangler is a global leader in workwear and lifestyle apparel. Specializing in the Western and outdoor segments, the brand is currently expanding its footprint in India and Europe through ‘WeCare’ sustainability initiatives. With a 10.6 per cent projected CAGR for high-performance fibers through 2026, Wrangler’s historical focus on rugged durability has evolved into a multi-billion-dollar digital and technical retail strategy.
The US textile sector has secured strategic support to shield defense supply chains, says National Council of Textile Organizations (NCTO), welcoming the establishment of the House Berry Amendment Caucus, a bipartisan legislative group dedicated to fortifying the domestic defense supply chain. Co-chaired by Representatives Pat Harrigan (R-NC) and Don Davis (D-NC), the caucus arrives at a pivotal juncture as the industry navigates proposed modifications to the FY26 National Defense Authorization Act (NDAA).
Defense procurement and industrial stability
The US textile industry remains a critical pillar of national security, contributing approximately $1.8 billion annually in high-tech components, uniforms, and specialized gear to the Department of Defense. Currently, the Berry Amendment mandates, military textile procurements utilize nearly 100 per cent domestic content and labor. However, industry leaders have voiced concerns regarding potential ‘final assembly only’ loopholes that could allow foreign-sourced yarns and fabrics into the military pipeline. The new caucus is expected to serve as a legislative firewall against such measures, ensuring that the 8,000 unique textile items used by the armed forces continue to support the domestic industrial base.
Strategic capital investment and market outlook
Despite broader macroeconomic volatility, the US textile market is projected to reach $204.52 billion in 2026, supported by a steady compound annual growth rate. Manufacturers are increasingly prioritizing capital expenditures - which totaled nearly $3 billion in recent cycle - toward advanced automation and digital engineering. This shift is designed to mitigate supply chain disruptions similar to those witnessed during the 2020-2022 period. By defending the Berry Amendment, the caucus provides the ‘predictable demand’ necessary for manufacturers to invest in next-generation protective technologies and high-performance fibers, ultimately securing the long-term viability of the nearly 471,000 workers within the domestic supply chain.
NCTO is the primary trade association representing the US textile supply chain, from fiber production to finished apparel. Focusing on the $64 billion domestic market, the organization advocates for trade policies and procurement rules like the Berry Amendment. NCTO’s current strategy emphasizes reshoring manufacturing and expanding high-tech technical textile exports, which recently reached $28 billion annually.
The Ministry of Environment, Forest and Climate Change has notified the Solid Waste Management (SWM) Rules 2026, a structural move that mandates industrial accountability from April 1. For the textile and apparel sector - which generates approximately 7,800 kilotons of waste annually -the framework marks the end of municipal-led disposal and the beginning of rigorous corporate compliance.
Mandated segregation and economic thresholds
Under the new regime, any garment factory or industrial park exceeding 20,000 sq m of built-up area or generating over 100 kg of waste daily is classified as a Bulk Waste Generator. These entities must now implement a mandatory four-stream segregation process: wet, dry, sanitary, and special care waste. This is a decisive shift toward auditable supply chains, notes an industry analyst. The rules also introduce Extended Bulk Waste Generator Responsibility (EBWGR), compelling units to process wet waste on-site or procure compliance certificates, thereby integrating environmental overheads directly into operational balance sheets.
Fuel substitution and export competitiveness
A critical development for the $248 billion textile market is the mandate for industrial units using solid fuels to substitute a portion of their energy intake with Refuse-Derived Fuel (RDF). Starting at a 6 per cent substitution rate in April 2026, this will scale to 15 per cent over six years, incentivizing the conversion of non-recyclable textile scraps into energy. This regulatory hardening arrives as Indian apparel exports seek to leverage 37 Free Trade Agreements (FTAs).
By aligning with global sustainability benchmarks, the industry aims to offset rising compliance costs with enhanced ‘sourcing credibility’ in the EU and US markets, where legislative scrutiny on landfill diversion is intensifying.
The nation’s second-largest employer, the Indian textile industry is transitioning from a traditional manufacturing hub to a circular economy participant. Focused on high-growth segments like technical textiles and recycled cotton (which holds a 32 per cent recycling market share), the sector targets a $656 billion valuation by 2034. Current growth strategies prioritize digital workflow management and automated cutting to reduce material wastage. While the industry faces near-term margin pressure from new environmental levies, the long-term outlook remains robust, supported by a 10.5 per cent projected revenue increase in FY26 and expanding export footprints in emerging markets.
