India's Textile Exports Set to Surge on FTAs and China's Retreat
India’s textile exports are poised for growth as free trade agreements (FTAs) and recovering global demand create new opportunities, while China’s share of global apparel exports continues to decline, according to a report by Motilal Oswal.
The report highlights that global clothing retailers and brands are becoming more optimistic about growth prospects as inventories stabilise, sell-through patterns improve, and discretionary demand in the US and Europe recovers. “This is leading to improved sourcing visibility and healthier ordering cycles, which is positive for Indian textile exporters through stronger order flows, better capacity utilisation, and improved margin visibility,” the report said.
India-UK FTA Key Driver for Textile Exports
The recently signed India-UK Free Trade Agreement (FTA) is expected to significantly enhance the competitiveness of Indian textile and clothing exports in the UK market. India currently accounts for roughly 6 percent of the UK’s more than USD 20 billion garment import market, due to an existing 8–12 percent import duty disadvantage compared with countries such as Bangladesh, Turkey, and Cambodia, which have duty-free access.
“The proposed FTA is expected to remove import duties, significantly improving India’s competitiveness in the UK market and aligning it with key sourcing nations,” the report noted.
China’s Declining Apparel Share Opens Door for India
China’s declining apparel export share from 37 percent in CY14 to 29 percent in CY24 is creating a significant opportunity for India, which is well-positioned to capture market share through recent trade agreements, PLI scheme support, and expanding production capacity, according to the Motilal Oswal report. The deal could help Indian exporters increase their market share in the UK when combined with the ongoing China+1 sourcing strategy and rising labour costs in China.
Overall, the continued decline in Chinese clothing shipments to the US is providing Indian exporters with a major opportunity to expand their international market share. China’s share of US apparel imports fell to 22 percent in 2023 from 37 percent in 2019, while its share of global garment exports declined to 29 percent in CY24 from 37 percent in CY14, the report added.
Positive Outlook for Indian Textile Exporters
The report by Motilal Oswal underscores that Indian textile exporters are expected to benefit from stronger order flows, better capacity utilisation, and improved margin visibility as global demand recovers and the China+1 trend accelerates. With the India-UK FTA set to level the playing field in a key market, India is well-positioned to capture a larger share of global textile trade.
