Textiles & apparel exports fall in first three quarters of FY26

The Indian textile and apparel industry, a cornerstone of the nation's economy, recently experienced a slight dip in overall exports during the first nine months of FY26. This trend, while seemingly minor, holds significant implications for India's economic health, employment landscape, and global trade standing. To truly grasp its importance, we must delve into the sector's background, the specific events, key players, and its broader ramifications.

Historically, India has been a global textile powerhouse, from the ancient Silk Route to the colonial era's impact and its resurgence post-independence. Today, it stands as the second-largest employer after agriculture, providing livelihoods to millions, particularly women in rural and semi-urban areas. The sector contributes significantly to India's GDP and foreign exchange earnings, making its export performance a critical indicator of economic vitality. The global economic environment leading up to FY26 has been volatile, marked by persistent inflation, interest rate hikes in major economies like the US and Europe, and lingering supply chain disruptions post-COVID-19. These factors collectively dampened global consumer demand, directly impacting export-oriented industries like textiles.

The article highlights a crucial nuance: while overall textile and apparel exports saw a "slight dip," there was a clear divergence in performance. Textile shipments, which include raw materials like yarn and intermediate products like fabric, declined. This segment is highly sensitive to global commodity prices and industrial demand. Conversely, apparel exports, representing finished garments, showed growth. This suggests a degree of resilience or a shift towards value-added products within the sector. The primary culprits for the export dip were identified as "restrictions in Bangladesh" and "market uncertainties in the US." Restrictions in Bangladesh could refer to increased competition, trade barriers, or shifts in their sourcing strategies, impacting India's yarn and fabric sales to a key regional market. The "market uncertainties in the US" directly point to reduced consumer spending due to inflation and economic slowdown in one of India's largest export destinations for home textiles and apparel. Faced with these challenges, some Indian exporters resorted to offering discounts to maintain sales volumes, a strategy that often squeezes profit margins.

Several key stakeholders are directly involved and affected by these trends. First and foremost are the **Indian textile manufacturers and exporters**, whose revenues, profitability, and future investments are directly tied to export performance. The **Government of India**, particularly the Ministry of Textiles and the Ministry of Commerce & Industry, plays a crucial role in formulating policies, offering incentives, and negotiating trade agreements to support the sector. Schemes like the Production Linked Incentive (PLI) Scheme for Textiles, the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, and the Rebate of State and Central Taxes and Levies (RoSCTL) for apparel are vital government interventions. The **millions of workers** employed across the textile value chain face potential job insecurity if the downturn persists. **International buyers** in the US, Europe, and other markets dictate demand, making their economic health critical for Indian exports. Lastly, **competitor nations** like Bangladesh and Vietnam constantly vie for market share, influencing India's strategic responses.

This situation matters profoundly for India. Economically, a sustained dip in exports impacts the **balance of trade**, potentially widening the current account deficit. It directly challenges the goals of the **"Make in India" and "Atmanirbhar Bharat" initiatives**, which aim to boost domestic manufacturing and make India a global manufacturing hub. Socially, the sector's immense employment generation capacity means that any slowdown can lead to job losses, particularly affecting vulnerable populations. From a geopolitical perspective, robust export performance strengthens India's negotiating position in global trade forums and bilateral agreements. The **Foreign Trade (Development and Regulation) Act, 1992**, provides the legislative framework for India's foreign trade, while constitutional provisions like **Part XIII (Articles 301-307)**, though primarily dealing with internal trade, underscore the importance of free trade and commerce for national economic prosperity. The power to legislate on foreign trade is vested in the Union under **Entry 41 of the Union List** (Seventh Schedule).

Looking ahead, the implications are clear. India needs to diversify its export markets beyond traditional destinations like the US and EU, exploring emerging economies. There's an urgent need to focus on value-added products, technical textiles, and sustainable manufacturing practices to enhance competitiveness. The successful negotiation and implementation of Free Trade Agreements (FTAs) with key partners can provide preferential market access. Continued government support through targeted schemes and infrastructure development is essential. The industry must also invest in technology upgradation and skill development to adapt to evolving global demands and maintain its competitive edge. The ability of the textile and apparel sector to navigate these global headwinds will be a critical test of India's economic resilience and its ambition to become a leading global manufacturing and export hub.