China+1 Shift Opens Multi-Year Growth Path for Indian Textiles
India’s textile industry is positioned for a multi-year growth opportunity as global brands increasingly diversify sourcing beyond China, according to a recent report by Jefferies. The global “China+1” strategy, combined with improving trade competitiveness and potential free trade agreements, could help Indian textile and apparel exporters expand their global market share. However, Jefferies highlighted India’s limited presence in man-made fibre (MMF) products as a key structural challenge that needs to be addressed.
The global textile and apparel market is valued at more than US$900 billion, with apparel accounting for around 60% of total trade. India is well placed to benefit from the ongoing shift in global sourcing due to its integrated fibre-to-fashion ecosystem, availability of raw materials, skilled workforce and established export base of approximately US$37 billion. According to Jefferies, supply-chain realignment and improving trade competitiveness could provide Indian exporters with a multi-year runway for higher exports and increased market share.
Despite these advantages, India’s textile exports remain heavily concentrated in cotton-based products, while global demand is increasingly moving towards MMF apparel, sportswear, athleisure and technical textiles. Expanding India’s capabilities across these segments could be critical for the country to capture a larger share of the global textile and apparel market.
Home textiles also offer significant growth potential for Indian manufacturers and exporters. The segment accounts for approximately 7–10% of global textile and apparel trade, with demand supported by housing growth, renovation spending, premiumisation and rising consumer interest in home aesthetics. India already holds a strong position in the US market, commanding around 45–60% of imports in key categories such as bed linen and towels. However, its presence in the UK and European Union markets remains comparatively lower, at around 5–25%, indicating further room for expansion.
Trade agreements could provide an additional boost to India’s textile exports. The UK free trade agreement, which became effective in July 2026, along with a potential India-EU FTA expected from 2027, could provide Indian exporters with preferential access to a combined textile and apparel import market estimated at around US$220 billion. Jefferies noted that these agreements, alongside China+1 sourcing, supplier consolidation and Bangladesh’s gradual loss of certain LDC-linked trade benefits, could create meaningful opportunities for Indian exporters.
The US, EU and UK together represent more than US$300 billion in apparel imports, yet India currently accounts for only around 3% of EU apparel imports and approximately 6% of the UK market. Jefferies identified several factors behind this relatively low penetration, including limited FTA coverage, higher logistics and compliance costs, smaller garment manufacturing scale and India’s predominantly cotton-focused export mix.
India also continues to face strong competition from Bangladesh and Vietnam in several US cotton apparel categories. At the same time, the country’s presence in MMF apparel, sportswear and athleisure remains limited. Strengthening manufacturing capacity in these high-growth categories, improving scale and competitiveness, and leveraging new trade agreements could therefore be crucial for India to fully capitalise on the China+1 opportunity.
With global brands continuing to diversify their supply chains, India has an opportunity to strengthen its position as a major textile and apparel sourcing destination. The combination of China+1 sourcing, FTAs, home textile strength and an integrated manufacturing ecosystem could support sustained export growth, provided the industry addresses its gaps in MMF products, scale, logistics and global competitiveness.