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The global textile and apparel industry is standing at a technological precipice, with the market for Artificial Intelligence (AI) in the sector projected to riseto $21 billion by 2033. This ten-fold increase from 2023 figures marks a decisive pivot from experimental technology to a core operational necessity. In response, the world’s leading organizer of textile trade fairs, Messe Frankfurt has launched a new strategic initiative titled ‘Texpertise Focus AI.’
The initiative to be launched at the Heimtextil fair in Frankfurt in January 2026. It aims to institutionalize AI across the entire textile value chain, signaling a formal industry-wide transition toward data-driven manufacturing and design.
The intelligence core of the global value chain
The initiative reflects a maturing market where AI is no longer a niche digital tool but a fundamental driver of efficiency. Current data indicates, approximately 13.5 per cent of European industrial firms have already integrated AI into their workflows as of 2024.
The transformation is particularly acute in production, where researchers at the German Institute of Textile Technology (ITA) estimate, upto 70 per cent of standardized production tasks could eventually be automated. By placing AI at the center of its international fair calendar, Messe Frankfurt is positioning itself as the primary orientation point for a sector grappling with a deepening skills shortage and the need for higher production resilience.
Designing the future through’Woven Intelligence’
The ‘Texpertise Focus AI’ program aims to spotlight the intersection of high-end design and computational technology. A cornerstone of the January 2026 launch will be the Architonic Live Talk featuring a London-based architectural futurist, Tim Fu.
Under the theme ‘Woven Intelligence: Designing Spaces in the Era of AI,’ the program will explore how generative AI enables meaningful collaboration between physical craft and digital architecture.
This synergy is further explored in Patricia Urquiola’s immersive installation, ‘Among All,’ which uses AI to simulate material properties and accelerate creative workflows, demonstrating that digital tools can enhance rather than replace human intuition.
Driving the ‘twin transformation’ of sustainability
The strategic shift is inextricably linked to the industry’s environmental imperatives- a concept known as the ‘twin transformation’ (the convergence of digitalization and sustainability).
Currently, the global industry produces 116 million tons of fibers annually, yet only 1 per cent of post-consumer waste is recycled. AI is emerging as the key to closing this circularity gap. By leveraging image-recognition systems for waste sorting and AI-based forecasting to prevent overproduction, manufacturers can significantly reduce the resource intensity of their supply chains. These advancements will be a focal point at Texprocess in April 2026, where the emphasis will move to hardware-software integration and life-cycle analytics.
Reshaping the workforce and production ;andscapes
As AI automates routine tasks, the textile workforce is undergoing a structural realignment. The industry is seeing the emergence of new job profiles centered on data analytics and digital process control. This evolution is vital for addressing labor shortages while simultaneously increasing output quality. Messe Frankfurt’s global rollout of this initiative will tailor its content to local market characteristics, ensuring that from fiber production to the point of sale, the ‘responsible use’ of AI becomes the standard.
By 2026, the ‘Texpertise Focus AI’ umbrella will serve as a permanent searchable directory and live demonstration platform, effectively acting as a bridge between current textile traditions and a highly automated, sustainable future.
Welspun Living has shattered industry benchmarks by securing a world-leading score of 90 in the 2025 S&P Global Corporate Sustainability Assessment (CSA). This achievement marks a staggering 24-point ascent from its 2023 performance, catapulting the Indian home-textile giant to the number one global position in the ‘Textile, Apparel & Luxury Goods’ category. While many global peers have struggled to maintain momentum amidst tightening reporting standards, WLL’s environmental score of 94 out of 100 underscores a profound shift. Indian manufacturing is no longer just a high-volume hub; it is increasingly becoming the global gold standard for ESG-led production.
The competitive edge of circularity in retail
This milestone arrives as the $130 billion global home textile market pivots toward ‘sustainable luxury.’ With global retail giants like Walmart and Costco increasingly linking vendor contracts to ESG transparency, WLL’s top-tier ranking serves as a powerful market-access tool. ‘Growth must be responsible and transparent,’ states Dipali Goenka, Managing Director & CEO, highlighting that WLL’s focus on circular material flows and clean energy is now a core business driver. By outperforming its global competitors in social and governance metrics, WLL is effectively de-risking its supply chain against upcoming international regulations. This leadership is critical as India aims to scale its textile exports to $100 billion by 2030, proving that environmental stewardship and aggressive commercial growth are no longer mutually exclusive.
A key entity of the $3.6 billion Welspun World, Welspun Living Limited (WLL) is a global leader in home textiles, specializing in towels, bed linens, and flooring solutions. Operating across more than 60 countries, the company maintains world-class integrated manufacturing facilities in India, serving as a primary supplier to top-tier global retailers. WLL’s strategic growth plan is built on three pillars: Branding, Innovation, and Sustainability, with a specific focus on expanding its domestic retail presence and increasing its share of value-added products.
Tommy Hilfiger joined the Spinnova consortium in late 2025, marking a strategic shift from experimental capsule collections to industrial-scale circularity. By joining this collaborative model, the PVH-owned brand gains priority access to a fiber that is arguably the ‘holy grail’ of sustainable textiles: a wood-and-waste-based material produced without harmful chemicals, dissolving pulps, or side streams. As the European Union’s Strategy for Sustainable and Circular Textiles begins to enforce stricter ecodesign requirements, Tommy Hilfiger is positioning itself ahead of the curve. The Spinnova fiber boasts a staggering environmental profile, utilizing 99 per cent less water and emitting 65 per cent less CO2 than traditional cotton production. This partnership is not merely about aesthetics; it is a defensive move to secure a supply of compliant, high-performance materials in a resource-constrained market.
Decarbonizing the premium apparel value chain
The integration of Spinnova across Tommy Hilfiger’s diverse product categories represents a major test for ‘Next-Gen’ materials in the premium retail sector. While many sustainable fibers struggle with durability, Spinnova’s mechanical process maintains the natural strength of the cellulose. We are pleased to welcome Tommy Hilfiger to the consortium, says Pedro Brito, Senior Commercial Manager, Spinnova. Their commitment aligns with our mission to scale textile materials that don't compromise the planet. This move follows a successful case study with Adidas, which proved the fiber could withstand the rigors of performance wear. For Tommy Hilfiger, the challenge lies in scaling this to meet the demands of a global supply chain while navigating the higher price premiums associated with early-stage fiber tech. However, with the sustainable apparel market projected to reach $20 billion by 2030, the investment serves as a crucial pillar for long-term brand relevance.
Tommy Hilfiger is one of the world’s most recognized premium designer lifestyle brands, offering high-quality apparel, footwear, and accessories. Owned by PVH Corp, the brand is a cornerstone of a portfolio that generated over $9 billion in annual revenue in recent fiscal years.
Knitwear Capital of India,’ Tiruppur, is witnessing a historic reversal of fortunes this December. Once the primary engine of India's apparel exports, the cluster has seen Rs 15,000 crore ($1.8 billion) in confirmed orders vanish since the US imposed a punitive 50 per cent tariff on Indian textiles in August 2025. MK Stalin, Chief Minister, Tamil Nadu has termed the situation a ‘looming humanitarian challenge,’ as daily revenue losses across the state's textile belt hit Rs 600 million. With US buyers demanding 25 per cent price haircuts to offset the levies, domestic manufacturers are facing a ‘margin collapse’ that has already forced production cuts of up to 30 per cent.
Shift to alternative hubs
The crisis is rapidly reshaping global sourcing maps. While India remains locked in a trade stalemate with Washington, competitors like Vietnam, Bangladesh, and Cambodia - facing significantly lower tariffs of 19 per cent to 20 per cent - are aggressively capturing Tiruppur's lost market share. ‘Once supply chains move, they rarely revert,’ Stalin warned in a high-stakes letter to Prime Minister Modi, emphasizing that the state’s 7.5 million textile workers are now at risk of mass layoffs. To counter this, New Delhi has accelerated its ‘FTA blitz,’ signing a landmark deal with Oman this week and finalizing the India-UK CETA to offer duty-free access for Indian garments elsewhere.
Tiruppur Exporters Association is the premier trade body representing the Rs 45,000 crore cotton knitwear cluster in Tiruppur, which accounts for 90 per cent of India’s cotton hosiery exports. Its single largest buyers includes the US which accounts for 35 per cent of its total exports, followed by the EU and the UK.
India’s textile and apparel sector has voiced a strong opposition against a recommendation by the Directorate General of Trade Remedies (DGTR) to impose steep Anti-Dumping Duties (ADD) on Mono Ethylene Glycol (MEG). Ranging from $103 to $137 per metric tons, these proposed duties have sparked a Pan-India protest involving over 15 major trade associations. Industry leaders warn that this move could dismantle the fragile progress made by recent GST reforms, which reduced taxes on Man-made Fiber (MMF) to 5 per cent. By effectively raising MEG costs by an estimated 20 per cent, the levy threatens to create a ‘chokehold’ on the downstream value chain, erasing the affordability gains intended to make Indian textiles globally competitive.
Domino effect on employment and MSME Viability
The collective of trade bodies, including the Northern India Textile Mills' Association (NITMA) and the Confederation of Indian Textile Industry (CITI), warned of severe socio-economic fallout if the Finance Ministry approves the DGTR’s findings. An estimated 40,000 MSMEs are at immediate risk of closure, potentially stalling Rs 20,000–Rs 30,000 crore in planned expansions. Furthermore, the duty jeopardizes approximately 3 lakh potential jobs linked to the Production Linked Incentive (PLI) scheme. By worsening the ‘Inverted Duty Structure,’ the proposed levy makes Indian exports significantly more expensive, handing a competitive advantage to global rivals in the $350 billion international textile market.
Lever Style Corporation is doubling down on its inorganic growth strategy to counteract a deteriorating global trade environment. By acquiring key assets from the Australia-based Active Apparel Group (AAG) in December 2025, the Hong Kong-listed group has secured its seventh major transaction since 2019.
This $13 million asset purchase comes at a critical juncture; with US apparel import tariffs hitting a multi-decade high of 26.4 per cent in mid-2025 and a potential tariff-induced recession looming for 2026, Lever Style is aggressively pivoting toward the resilient activewear sector. ‘Bad times are the best times to buy,’ notes Stanley Szeto. Executive Chairman, signaling a move to utilize the industry downturn to capture market share from credit-strained competitors.
High-performance portfolios and the Sun Day Red synergy
The acquisition specifically targets the activewear market, which remains the industry’s primary growth engine with a projected global value of $431.12 billion in 2025. AAG brings 38 years of technical expertise and a premium client roster including Greyson, Johnnie-O, and Tiger Woods’ high-profile Sun Day Red brand. This portfolio complements Lever Style’s existing partnerships with performance giants like Arc’teryx and Skims.
By integrating AAG’s technical sophistication, Lever Style enhances its operating leverage, allowing it to offer cross-selling opportunities across its ‘asset-light’ modular platform. This strategy is essential for navigating a market where US demand for Chinese imports has plummeted by nearly 38 per cent, forcing a rapid shift to the group’s multi-country network in Vietnam, India, and Cambodia.
Lever Style Corporation is a leading global production platform for the premium contemporary and performance apparel sectors. The company operates a unique modularized supply chain that supports over 150 brands through a network of more than 100 partner factories across seven countries.
Unlike traditional manufacturers, Lever Style utilizes an asset-light model that focuses on design, technical development, and logistics rather than factory ownership. This allows the group to remain highly agile, moving production between regions to mitigate geopolitical risks and tariff spikes.
Circulose and Birla Cellulose signed a partnership agreement on December 18, 2025 to intergrate Circulose’s 100 per cent recycled textile pulp into Birla’s massive industrial footprint- the company currently holds a 15.7 per cent global volume share in man-made cellulosic fibers (MMCF).
This collaboration is strategically timed to meet the massive demand spike triggered by the European Union's 2025 updates to the Waste Framework Directive. New Extended Producer Responsibility (EPR) mandates now require brands to finance the management of the 5.2 million tons of textile waste generated annually in the EU. For global retailers, the Birla-Circulose pipeline offers a crucial compliance solution. The company’s partnership with Birla is a cornerstone of their strategy to enable mainstream adoption, states Jonatan Janmark, CEO, Circulose. The alliance effectively de-risks the supply chain for brands by providing a ‘ready-to-weave’ recycled fiber that matches the quality of virgin viscose.
Commercializing the $44 billion next-gen pipeline
While textile-to-textile recycling was once hindered by high capital costs and fragmented collection, the industry is entering a hyper-growth phase. Analysts project the global textile-to-textile recycling market will surge from $4.8 billion in 2025 to a staggering $44.8 billion by 2034. As a case in point, Birla’s consistent ‘Dark Green Shirt’ rating in the 2025 Canopy Hot Button Report underscores the trust global brands place in this supply chain. This partnership solves the ‘scaling gap’ by ensuring that recycled pulp is immediately converted into high-performance staple fiber, allowing fashion houses to meet their 2030 recycled-content targets without compromising on texture or durability.
The pulp and fiber arm of the Aditya Birla Group, Birla Cellulose is a global leader in sustainable Man-Made Cellulosic Fibers (MMCF). Operating 11 manufacturing sites and five advanced R&D centers, the company specializes in viscose, lyocell, and modal fibers. Birla has achieved the highest sustainability ranking in the Canopy Hot Button Report for six consecutive years, driven by its commitment to net-zero carbon emissions by 2040 and a 50% reduction in water intensity by 2025.
The Indian rupee’s historic slide past the ₹90.43 per dollar mark in late 2025 has forced a fundamental recalibration across India’s $179 billion textile value chain. While a "weak" rupee is often celebrated as a windfall for exporters, the reality is a complex "double-edged thread." For an industry that employs 45 million people, the currency's depreciation is acting as both a catalyst for global price competitiveness and a crushing weight on the cost of essential imported inputs. As global supply chains shift, the question for Indian manufacturers has evolved from whether the falling rupee is a "pain" to how quickly they can transform this volatility into a strategic "opportunity."
The Imported Inflation Squeeze: From fiber to chemicals
The immediate impact of the rupee’s descent is visible in the rising cost of production. India remains significantly dependent on imports for high-end synthetic raw materials and specialty chemicals. For instance, the Man-Made Fiber (MMF) segment—a key focus for future growth—relies on imported Mono Ethylene Glycol (MEG) to supplement domestic deficits. With the dollar strengthening, the cost of these inputs has surged by nearly 6–8% in just the last quarter.
Beyond raw fibers, the "hidden" cost of the falling rupee lies in processing. India imports approximately 70–80% of its high-end specialty dyes and functional chemicals used for performance wear and fast-fashion finishes. Every cent the rupee loses adds directly to the processing bill. When manufacturers combine expensive dollar-denominated chemicals with the 25% spike in domestic logistics costs, the currency-led export advantage starts to evaporate before the garment even leaves the factory.
The machinery gap and the cost of modernization
A critical bottleneck in India’s quest to rival China and Vietnam is the reliance on imported technology. To meet the global demand for high-speed, automated production, Indian mills import advanced shuttleless looms, knitting machines, and digital printing equipment primarily from Germany, Italy, and Japan. As the rupee tests the ₹91 level, the capital expenditure (CAPEX) for modernization has bloated. A machine that cost ₹1 crore in early 2024 now requires an additional ₹8–10 lakh due to currency fluctuations alone. This "modernization tax" is particularly heavy on MSMEs who are trying to scale up under the government's Production Linked Incentive (PLI) scheme but find their dollar-denominated machinery loans increasingly difficult to service.
Supply Chain Impact: The "Fibre-to-Finished" cost matrix
The following table illustrates how the rupee's depreciation filters through different stages of the textile supply chain as of late 2025:
|
Supply Chain Stage |
Key Imported Input |
Impact of Rupee at ₹90+ |
Sector Sentiment |
|
Fiber & Yarn |
MEG, Specialty PSF |
High Pain: Input costs up 7% |
Negative/Neutral |
|
Processing |
Dyes, Silicone Oils, Finishers |
Medium Pain: 10% rise in chemical bills |
Neutral |
|
Manufacturing |
CNC Looms, Automated Stitching |
High Pain: CAPEX costs up 12% |
Stressed |
|
Finished Apparel |
Global Brand Licensing/Tech |
Opportunity: 5-6% better export pricing |
Optimistic |
Export resilience in a protectionist era
Despite the input cost hurdles, the "opportunity tomorrow" is beginning to manifest in export volumes. In the first half of FY26 (April–September 2025), India’s textile and apparel exports showed a gritty resilience, growing to $18.23 billion. While apparel exports to the U.S. have faced headwinds due to a 50% "reciprocal tariff" wall, Indian exporters have successfully adjusted their focus toward the EU, UAE, and Australia. The weakened rupee has allowed Indian firms to offer more competitive pricing in these markets, helping to offset the higher cost of imported machinery and raw materials. In clusters like Tirupur, a 11.4% growth in exports during the middle of 2025 suggests that the industry is learning to navigate its way out of the currency crisis.
Strategic Hedging: The MSME survival blueprint
To survive the current volatility, manufacturers are moving away from "waiting for the dip" and toward aggressive financial hedging and domestic substitution. The industry is seeing a surge in forward contracts to lock in dollar rates for machinery imports, while larger mills are increasing their "in-house" chemical blending to reduce reliance on imported finished dyes. This shift represents a move toward a more sophisticated, risk-aware ecosystem that prioritizes long-term stability over short-term currency gains.
The Indian textile & apparel landscape
The Indian textile and apparel industry is a cornerstone of the national economy, currently valued at approximately $179 billion with a target to reach $350 billion by 2030. The landscape is characterized by its "farm-to-fashion" integration, where India stands as the world’s second-largest producer of cotton and a top-six exporter of MMF textiles. Key markets include the U.S., which accounts for nearly 29% of exports, alongside a rapidly growing domestic market valued at $142 billion. Growth plans are currently anchored by the PM MITRA scheme, which is establishing seven mega-integrated textile parks to centralize the supply chain and reduce logistics costs. Financially, the sector is in a phase of "cautious expansion," with the government extending the PLI scheme application deadline to December 31, 2025, to encourage fresh investment in technical textiles and MMF. Historically, the industry has transitioned from a traditional handloom-heavy base to a global manufacturing hub, though it currently faces the challenge of diversifying away from its 70% cotton-dependent export basket toward the more globally traded synthetic fiber segments.
Fresh data from the US Census Bureau reveals. a cooling in the retail sector, with October sales remaining unexpectedly flat despite a resilient start to the final quarter. While broader consumer spending has propped up the economy, the fashion and apparel industries are bearing the brunt of a ‘K-shaped’ divergence. High-income households, buoyed by a 15 per cent annualized rise in net worth, continue to spend on luxury and travel. In contrast, middle- and lower-income families are aggressively scaling back, facing a 26.4 per cent average tariff rate on apparel imports—the highest in decades.
For the fashion industry, October was a month of ‘holding the line.’ Adjusted spending at clothing and accessories stores saw less than a 1 per cent change, effectively plateauing as shoppers prioritized essentials over aesthetics. This stagnation comes as the cost of living remains elevated, with women’s denim and footwear prices rising between 6 per cent and 8 per cent Y-o-Y year-over-year. The impact of President Trump’s ‘America First’ tariffs has hit the sector particularly hard; with 98 per cent of clothing sold in the US being imported, the removal of duty-free exemptions for small packages has forced brands to either absorb costs or risk alienating an already cautious consumer base.
Resilience amidst macroeconomic fog
Despite the flat headline numbers, the underlying economic engine remains warm. ‘Core’ retail sales, which exclude volatile sectors like gasoline and autos, actually rose 0.8 per cent in October, suggesting, those with disposable income are still active. Economists at the Atlanta Federal Reserve currently estimate Q3 GDP growth at a robust 3.5 per cent. However, the future remains hazy; as noted by Bank of America analysts, the reliance on top-tier earners to carry the weight of U.S. consumption creates a fragile equilibrium. If the ‘wealth effect’ from a booming stock market cools, the apparel sector's ‘flat’ October could easily slide into a winter contraction.
As a bellwether for American retail, Gap Inc. is navigating this polarized economy through a multi-brand strategy that targets both the value-conscious and the aspirational shopper.
A global retail powerhouse operating Old Navy, Gap, Banana Republic, and Athleta, Gap Inc focuses on casual American style with a recent emphasis on ‘cultural equity’ through celebrity-led marketing. The company operates predominantly in North America, which generates over 85 per cent of total revenue, with a significant in-store footprint where 58 per cent of consumers still prefer to shop.
