India’s textile exports rise 2.1% in FY26 to ₹3.16 lakh crore, led by RMG

India's textile exports (including handicrafts) grew 2.1% in FY 2025-26 to ₹3,16,334.9 crore, up from ₹3,09,859.3 crore in FY 2024-25, according to data rele...

What Happened

India's textile exports (including handicrafts) grew 2.1% in FY 2025-26 to ₹3,16,334.9 crore, up from ₹3,09,859.3 crore in FY 2024-25, according to data released by the Ministry of Textiles.
Ready-Made Garments (RMG) of all textiles remained the largest contributor, rising 2.9% from ₹1,35,427.6 crore to ₹1,39,349.6 crore in FY26.
Man-made yarn, fabrics, and made-ups posted the strongest growth among fabric segments at 3.6%, from ₹41,196 crore to ₹42,687.8 crore.
Handicrafts (excluding handmade carpets) recorded the highest growth rate in the sector at 6.1%, reaching ₹15,855.1 crore.
Cotton yarn, fabrics, made-ups, and handloom products grew marginally at 0.4%, from ₹1,02,002.8 crore to ₹1,02,399.7 crore — indicating relative stagnation in the traditional cotton segment.
The growth was achieved despite steep US tariffs: reciprocal tariffs on Indian textile exports began at 10% from April 2, 2025, escalating to 25% by August 7 and 50% by August 28, 2025, before easing in early February 2026.
The US remains the top export destination for Indian RMG, accounting for 34.11% of RMG shipments; followed by the UK (8.81%), UAE (7.85%), Germany (5.51%), and Spain (5.29%).

Static Topic Bridges

India's Textile Industry: Structure, Scale, and Policy Significance

India's textile and apparel industry is one of the oldest and most diverse manufacturing sectors in the economy. It contributes approximately 2.3% of GDP, around 13% of total industrial output, and over 12% of India's merchandise export earnings. The sector is the second-largest employer in India after agriculture, providing employment to approximately 45 million people directly, with an additional 100 million in allied activities (cotton farming, handloom weaving, etc.).

The sector spans the entire value chain — from raw material production (cotton, jute, silk, wool, man-made fibres) through spinning, weaving, processing, and garmenting to retail. India is the world's second-largest producer of cotton and the third-largest exporter of textiles and apparel globally.

Textile sector contribution to GDP: approximately 2.3%.
Share in industrial output: approximately 13%.
Share in merchandise exports: approximately 12%.
Employment: approximately 45 million direct jobs; 100+ million including allied activities.
India: world's second-largest cotton producer.
India: third-largest exporter of textiles and apparel globally.
National Textile Policy: the sector's last major policy document (2000); a revised policy has been under consideration.

Connection to this news: The FY26 export figure of ₹3.16 lakh crore reflects the sector's continued centrality to India's export basket and employment, even as it navigates headwinds from US tariffs and competition from other Asian exporters like Bangladesh, Vietnam, and Cambodia.

Production Linked Incentive (PLI) Scheme for Textiles

The PLI Scheme for Textiles was notified on September 24, 2021, with an outlay of ₹10,683 crore over a five-year implementation period. The scheme targets man-made fibre (MMF) apparel, MMF fabrics, and technical textiles — segments where India historically lacked competitiveness relative to countries like China, Bangladesh, and Vietnam.

The PLI framework offers performance-based incentives calculated as a percentage of incremental sales over a base year. For textiles, the scheme focuses on segments with high export potential, large-scale production capabilities, and employment intensity. The scheme seeks to address India's structural dependence on the cotton segment and encourage diversification into technically advanced, higher-value products.

PLI Scheme for Textiles: notified September 24, 2021; outlay of ₹10,683 crore.
Target segments: MMF apparel, MMF fabrics, technical textiles.
Incentive structure: percentage of incremental sales above a base year threshold over 5 years.
Strategic objective: diversify from cotton into MMF and technical textiles; increase export competitiveness.
PM MITRA Parks: 7 parks approved across Madhya Pradesh, Telangana, Uttar Pradesh, Andhra Pradesh, Karnataka, Gujarat, and Maharashtra — aimed at creating integrated textile clusters.
Government target: make India the world's second-largest textile exporter by 2030.

Connection to this news: The 3.6% growth in man-made yarn and fabrics exports in FY26 reflects early gains from PLI incentivisation of the MMF segment. The growth of technical textiles and MMF categories aligns with the PLI's strategic objective of reducing the sector's cotton-only dependence.

Ready-Made Garments (RMG) and Export Competitiveness

Ready-Made Garments (RMG) is the highest value-added segment of the textile value chain — converting raw fibre or yarn into finished garments for direct consumer use. It is labour-intensive, women-employment-intensive (approximately 70% female workforce in Indian RMG factories), and deeply linked to global fashion supply chains.

India faces competition in RMG exports primarily from Bangladesh (which benefits from preferential market access to the EU under EBA/GSP schemes), Vietnam (which has bilateral FTAs with the EU and UK), and Cambodia. India has been seeking Free Trade Agreements (FTAs) with major markets to level the playing field. The India-UK FTA (under negotiation) and India-EU FTA (under negotiation) are specifically expected to benefit the RMG sector by reducing tariff disadvantages faced by Indian exporters relative to competitors.

RMG: highest value-added textile segment; directly employs an estimated 12-15 million workers in India.
India's RMG export composition by destination (FY26): USA 34.11%, UK 8.81%, UAE 7.85%, Germany 5.51%, Spain 5.29%.
Bangladesh RMG advantage: EU EBA (Everything But Arms) preferential access; lower wage costs.
Vietnam advantage: EU-Vietnam FTA (in force since 2020) reduces tariffs significantly.
India-UK FTA and India-EU FTA: pending negotiations; expected to reduce RMG tariff disadvantage.
US tariff escalation on Indian textiles (FY26): 10% from April 2025 → 25% from August 7 → 50% from August 28, before easing in February 2026.

Connection to this news: Despite the US tariff shock — India's single largest RMG export market — the RMG segment still grew 2.9% in FY26. This resilience reflects demand stickiness for Indian apparel in key markets and active diversification to EU destinations such as Germany (+9.9%) and Spain (+15.5%).

Key Facts & Data

India's total textile exports FY26: ₹3,16,334.9 crore (growth: 2.1% from ₹3,09,859.3 crore in FY25).
RMG exports FY26: ₹1,39,349.6 crore (growth: 2.9%); largest contributor to textile exports.
Man-made yarn, fabrics, made-ups FY26: ₹42,687.8 crore (growth: 3.6%).
Cotton yarn, fabrics, made-ups, handloom FY26: ₹1,02,399.7 crore (growth: 0.4%).
Handicrafts (excluding handmade carpets) FY26: ₹15,855.1 crore (growth: 6.1% — highest growth rate).
Top RMG export destination: USA (34.11%), UK (8.81%), UAE (7.85%), Germany (5.51%), Spain (5.29%).
US tariff on Indian textiles: peaked at 50% (August 28, 2025); eased in early February 2026.
PLI Scheme for Textiles: notified September 24, 2021; outlay ₹10,683 crore; targets MMF and technical textiles.
PM MITRA Parks: 7 approved (MP, Telangana, UP, AP, Karnataka, Gujarat, Maharashtra).
India's textile sector: ~2.3% GDP, ~45 million direct jobs, ~12% of merchandise exports.
Government target: world's second-largest textile exporter by 2030.
India: world's second-largest cotton producer; third-largest textile and apparel exporter globally.