India's textile and apparel industry could be entering a new phase as global brands diversify sourcing beyond China, while lower US tariffs and new trade agreements improve the country's export competitiveness. The opportunity comes at a time when India's textile and apparel exports are around $37 billion, while the government has set an ambitious target of taking the broader textile industry to $350 billion by 2030.
India's apparel ecosystem has remained fragmented, limiting its ability to compete with more integrated sourcing destinations. Higher cost of capital has also constrained large-scale investments, while integrated fibre-to-fashion manufacturing hubs have remained limited.
As a result, India's share of global apparel exports has remained broadly stagnant despite its large domestic textile base and manufacturing capabilities.
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China's share of global apparel exports fell from 36.9% to 27.3% in 2025, creating room for other manufacturing hubs. Yet India has not been a major beneficiary so far. Its share slipped from 3.2% in 2010 to 3.0% in 2025, even as Bangladesh and Vietnam expanded rapidly. The combined export share of Bangladesh and Vietnam rose from around 7% to more than 13% in 2025, highlighting the scale of the opportunity India has struggled to capture.
What Has Changed For Indian Apparel?
US tariffs on Indian goods have fallen from a peak of 50% to around 10%-18%, reducing a major cost disadvantage for exporters. The India-UK trade pact also removes an earlier apparel duty disadvantage, while the India-EU FTA improves access to a market estimated at around EUR 200 billion. Together, these developments could make India more attractive to global brands looking to diversify sourcing away from China.
The China+1 strategy is another tailwind. Global apparel companies are actively looking to spread supply chains across countries, creating an opportunity for Indian manufacturers that can offer scale, reliability and competitive costs.
Which Apparel Stocks Could Benefit?
According to PL Capital, Pearl Global, Gokaldas Exports and KPR Mill emerge as the primary beneficiaries of the changing global sourcing environment. The brokerage's stock table shows strong brokerage conviction across several textile names.
Gokaldas Exports has 11 Buy calls out of 12, or 91.7%, with a 42% return potential. Arvind has nine Buy calls out of 10, while Pearl Global has eight Buy calls, representing 100% of the brokerage coverage cited. KPR Mill has 13 Buy calls, or 86.7%, with 14% return potential.
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