India’s textile and apparel export performance in the first three quarters of FY26 has painted a mixed and cautious picture. While apparel shipments managed to stay on a growth track, overall exports slipped marginally, weighed down by a decline in textile exports. According to an analysis of government data, cumulative textile and apparel exports fell by 0.26% during April–December 2025 compared with the same period last year, highlighting the pressures faced by exporters amid global uncertainty. The slowdown reflects not a collapse in demand, but rather a period of adjustment marked by geopolitical disruptions, pricing pressures, and cautious buying behaviour in key overseas markets.

Textiles Under Pressure, Apparel Shows Resilience

The decline in overall exports was largely driven by the textile segment, which recorded a 2.19% drop during the first nine months of FY26. Yarn and fabric exports were particularly affected, as disruptions in Bangladesh and uncertainty in the United States market disrupted traditional trade flows. Exporters reported softer demand, delayed orders, and intense price negotiations, forcing some companies to offer discounts simply to retain volumes.

In contrast, apparel exports grew by 2.36% over the same period, offering a degree of relief to the sector. Industry observers note that India’s diversified apparel base, flexible manufacturing capabilities, and steady demand from select global buyers helped cushion the impact of broader market challenges. This divergence underscores a shifting export dynamic, where value-added apparel continues to perform better than commodity-driven textile segments.

Global Uncertainty Weighs on Exporters

Market volatility in the US, India’s largest export destination for textiles and home furnishings, emerged as a major headwind. Companies with heavy dependence on the US home textile market faced sharper stress, as cautious retail sentiment and inventory corrections curbed fresh sourcing. At the same time, operational and political restrictions in Bangladesh, a key regional hub, indirectly affected yarn and fabric trade patterns across South Asia.

Industry body CITI noted that exporters are currently navigating a tightrope balancing pricing, volumes, and margins in an environment where buyers remain risk-averse. While the marginal dip may appear modest on paper, it reflects deeper structural challenges that the sector must address through market diversification, product innovation, and stronger value addition.