India’s Textile Industry Positioned for Long-term Growth as Global Sourcing Shifts Beyond China: Report
India’s textile industry is well positioned for sustained long-term growth as global brands increasingly diversify their sourcing strategies beyond China, according to a research report by 360 One Capital. The report says the ongoing China+1 strategy, expanding trade agreements and global supply chain diversification present significant opportunities for India to strengthen its position in international textile and apparel markets.
The report highlights that companies with scalable garment manufacturing, integrated production facilities, strong customer relationships and consistent operational execution are likely to benefit the most from the changing global sourcing landscape.
As international brands seek to reduce dependence on China amid geopolitical uncertainties and the need for more resilient supply chains, India is emerging as an attractive sourcing destination. However, the report cautions that favourable trade agreements alone will not guarantee long-term success.
According to 360 One Capital, India’s ability to convert these opportunities into higher exports and increased global market share will depend on its manufacturing competitiveness, productivity, scale, technical capabilities, compliance standards and delivery reliability.
The report notes that India’s share of global apparel exports has remained around 3% over the past two decades, while Bangladesh has expanded its share to 9–10% and Vietnam to 6–7%. It identifies fragmented garment manufacturing and limited production scale as key structural challenges preventing India from securing larger global sourcing orders.
The study further states that competitiveness is increasingly driven by labour productivity, automation, operational efficiency, faster turnaround times, sustainability, logistics and supply chain resilience rather than low labour costs alone.
It also recommends that India diversify beyond cotton by expanding its capabilities in man-made fibres (MMF), performance apparel and technical textiles, while improving cotton productivity, fibre quality and traceability.
While trade agreements such as the India–UK Free Trade Agreement enhance India’s sourcing appeal, the report emphasises that expanding garment manufacturing capacity, strengthening compliance standards and developing new labour-intensive manufacturing clusters will be essential to fully capitalise on these opportunities.
Looking ahead, 360 One Capital expects automation, sustainability and product traceability to become the key competitive advantages shaping the future of India’s textile industry.