India’s textile industry, long woven into the fabric of its economy and culture, is once again entering a phase of transformation. From cotton fields to spinning mills, from handlooms to high-tech polyester plants, this sector continues to evolve, facing both timeworn and emerging challenges. Yet, as the global supply chain reorients post-pandemic and amid shifting trade dynamics, India finds itself at a strategic crossroads — an opportunity it cannot afford to miss.
In this in-depth look, we explore the present and future of the textile industry in India, grounded in recent research and industry insights, to understand the driving forces, hurdles, and the untapped potential that lies ahead.
The textile industry in India is not just an economic engine — it’s a way of life for millions. From rural weavers to large-scale industrial plants, the sector provides employment to over 45 million people and contributes significantly to export revenues.
Despite global disruptions, India’s textile industry has shown signs of resilience, especially in the upstream segment — where cotton and polyester yarns are produced.
India’s cotton yarn segment is poised for a healthy 7–9% revenue growth in FY26. This rebound is fueled by:
After a harsh 22% drop in FY24 revenue due to price declines, FY25 and FY26 are expected to see recovery, supported by increased volumes and slightly higher price realizations.
⚠️ However, domestic cotton remains pricey. With Indian cotton costing ~83–84 US cents/lb against NY futures at ~67–69 cents, this cost gap squeezes margins.
To stabilize prices, the Cotton Corporation of India (CCI) is planning to procure 10 million bales — a move that could prevent oversupply and support the market.
India’s polyester yarn sector faces a flat revenue outlook, but with a silver lining — improving margins:
Margins could rise to around 6.75% in FY26, compared to just over 5% in FY24. That’s a notable improvement, even if top-line growth remains modest.
But there’s a formidable competitor in sight — China.
🇨🇳 With a 62% global export share and massive integrated capacity, China’s dominance in polyester yarn continues to limit India’s export opportunities unless large-scale investments are made.
There’s a subtle but powerful shift happening in global trade. As tensions rise between the US and China, global buyers are diversifying sourcing away from China.
🌐 Countries like India, Bangladesh, and Vietnam are now under serious consideration as alternative supply hubs. India also benefits from the upcoming India–UK Free Trade Agreement (FTA).
While US tariffs directly affect only 3–5% of India’s yarn exports, the indirect boost to downstream segments like garments and home textiles could uplift demand for yarn domestically.
Even with positive forecasts, the textile industry in India faces tough realities:
These are not small issues — unless addressed with urgency and innovation, India risks missing its golden opportunity.
India’s spinning capacity is underutilized. Of the 53–54 million installed spindles, only 42–43 million are active. Mills are hesitant to modernize due to low profitability.
However, hope lies in:
These could be game changers if acted upon swiftly.
For investors, the textile sector presents promising opportunities. Some key players with strong fundamentals and growth potential include:
These companies are managing cost pressures effectively and have healthy balance sheets — a key trait in today’s volatile environment.
The textile industry in India is at a pivotal moment. With a blend of old-world craftsmanship and modern industrial strength, the country stands to gain massively from global trade realignments.
But this gain won’t come automatically. It demands:
With the right push, India can stitch together a future where its textiles aren’t just competitive — they’re world-leading.
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