India’s textile and apparel sector closed FY 2025-26 with exports worth Rs 3,16,334.9 crore, a 2.1 per cent increase that, at first glance, appears incremental. Beneath this modest expansion lies a more consequential transition. The industry is steadily moving away from its historic dependence on raw material exports toward a value-added manufacturing model, even as global demand conditions remain uneven and input costs, particularly energy-linked synthetics continue to fluctuate.

This shift is not merely cyclical. It reflects a deliberate repositioning as India attempts to secure a higher share of global apparel trade, where margins are structurally stronger and supply chain integration increasingly determines competitiveness.

Apparel sector the growth driver

The export basket underscores this change toward value addition. Ready-Made Garments (RMG) remain the dominant growth driver, while traditional segments such as cotton textiles and handicrafts show slower momentum.

Table: India’s textile and apparel exports overview

The table reveals a clear hierarchy: RMG not only commands the largest share but also leads in growth. This reflects India’s gradual climb up the value chain, where finished garments increasingly outperform upstream segments. Cotton textiles, while still significant, are losing relative momentum, while MMF, despite being central to global demand remains constrained by domestic structural inefficiencies.

Geographically, diversification has become a stabilizing force. Expansion into over 120 markets has reduced reliance on traditional Western demand centers. Strong growth in the UAE and Japan highlights how trade agreements and bilateral alignments are reshaping export flows, even as elevated crude prices continue to inflate freight and synthetic input costs.

PM MITRA parks the growth boosters

At the core of India’s long-term competitiveness lies the PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme. With a Ra 4,445 crore outlay, the initiative aims to compress the entire textile value chain from spinning to garmenting into integrated industrial ecosystems.

The implementation status across the seven approved parks, however, reveals a mixed picture of early success and execution strain. The leading cluster of parks has moved decisively into operational territory. Dhar in Madhya Pradesh has emerged as the frontrunner, with over 1,130 acres allotted and an investment pipeline exceeding Rs 21,000 crore. Tamil Nadu’s Virudhnagar park demonstrates the advantages of logistics-led planning, attracting over Rs 2,000 crore in committed capital. Telangana’s Warangal site, leveraging an existing textile base, has also secured significant early-stage investments.

In contrast, a second tier of parks, Amravati, Navsari, and Lucknow remains in the infrastructure build-out phase. These projects are heavily dependent on external connectivity investments, with funds drawn from a Rs 2,160 crore infrastructure pool to ensure last-mile access. Karnataka’s Kalaburagi park, despite completing land acquisition, is still in the early stages of trunk infrastructure development. This difference highlights a critical reality: land allocation is no longer the primary bottleneck execution velocity is.

Promise vs reality

The industry’s response to PM MITRA reflects a dual narrative. On one side, large-scale manufacturers and industry bodies view the parks as a structural leap. Integrated ecosystems promise to reduce logistics friction, compress lead times, and potentially lower operating costs by 10-12 per cent, bringing India closer to the efficiency benchmarks set by Bangladesh and Vietnam.

On the other side, MSME exporters remain cautious. The persistent inverted duty structure in the MMF segment where fiber attracts higher GST than finished fabric continues to lock up working capital. For smaller firms operating on thin margins, this fiscal distortion offsets many of the efficiency gains promised by physical infrastructure. The tension between physical scale and financial fluidity has become one of the defining challenges of India’s textile policy landscape.

A success story, the Virudhnagar PM MITRA park

The Virudhnagar PM MITRA park offers a glimpse of what successful execution could look like. By aligning with the PM Gati Shakti National Master Plan, the park integrates GIS-based logistics planning with direct port connectivity via VO Chidambaranar Port. This has translated into measurable gains. Early-stage units report a reduction of nearly 12 per cent in logistics costs, alongside the elimination of traditional inland transport delays that could extend up to two weeks. The model demonstrates how infrastructure, when synchronised with national logistics planning, can deliver immediate operational efficiencies rather than deferred benefits.

Execution as the litmus test

Despite strong investor interest estimated at over Rs 63,000 crore across all parks the success of PM MITRA hinges on consistent execution across states. Recognising uneven progress, the Union Budget 2026-27 introduced a ‘Challenge Mode’ framework for future parks, compelling states to compete on parameters such as power tariffs, labor flexibility, and regulatory ease.

This marks a shift from allocation-driven policy to performance-driven competition. The underlying objective is clear: prevent large-scale industrial zones from becoming underutilised land banks and instead ensure they evolve into globally competitive manufacturing hubs.

India’s textile industry, valued at approximately $152 billion, contributes around 2 per cent to GDP and employs over 45 million people. Its long-term ambition, to scale to $250 billion by 2030 rests on a combination of export expansion, infrastructure modernization, and policy alignment.

The 5F vision: Farm to Fiber to Factory to Fashion to Foreign captures this integrated approach. However, as the current phase demonstrates, achieving this vision will depend less on policy intent and more on execution discipline.

India’s textile export story is no longer defined by volume alone. It is increasingly shaped by how effectively the country can integrate infrastructure, resolve fiscal distortions, and sustain diversification in global markets.

The 2.1 per cent export growth in FY 2025–26 may appear modest, but it signals a sector in transition. The real inflection point lies ahead, where the success or failure of mega-scale infrastructure like PM MITRA will determine whether India can move from being a competitive supplier to a dominant global manufacturing hub.