India's Textile Industry Gains Momentum Amid New Challenges

India’s textile industry is navigating a mixed 2026, with export growth and government-backed initiatives supporting the sector.

However, rising input costs and labor concerns are creating create pressure on manufacturers.

Textile exports increased 2.1 percent in FY 2025-26, supported by global demand, policy measures and wider market access. At the same time, the government is pushing circularity, recycling and traceability to make textile production more sustainable. Maharashtra is also working to strengthen its textile value chain and global competitiveness.

However, manufacturers in Karur are facing sharp cotton yarn price increases, while labor unrest in Surat has highlighted workforce concerns. Together, these developments show both the opportunities and challenges shaping India’s textile industry.

Textile Minister Pushes Circularity at Navi Mumbai Recovery Hub

Union Minister of Textiles Giriraj Singh reviewed the Textile Recovery Facility (TRF) in Navi Mumbai and called for stronger textile recycling and circularity systems. The facility focuses on diverting pre-consumer and post-consumer textile waste from landfills through collection, segregation, upcycling and recycling.

The minister inspected processes including automated sorting, fiber identification, shredding and recovery of secondary materials. He also suggested expanding the initiative beyond the Navi Mumbai Municipal Corporation (NMMC) area.

During the visit, the Textiles Committee and Refibre signed a Letter of Intent to develop a digital circular textile infrastructure platform covering post-consumer textile collection, traceability and impact measurement.

Key Highlights

• Giriraj Singh reviewed textile waste sorting, fiber identification, shredding and material recovery at the Navi Mumbai facility.
• The recovery facility aims to keep pre-consumer and post-consumer textile waste away from municipal landfills.
• The minister called for the initiative to expand beyond the Navi Mumbai Municipal Corporation area.
• The Textiles Committee and Refibre signed an LOI for a digital platform covering collection, traceability and impact measurement.
• Technology developed by Kosha is being used to segregate discarded clothing according to fiber groups.
• The initiative involves collaboration between the Textiles Committee, NMMC, SBI Foundation and Tisser Artisan Trust.

Also Read: Global Market Trends in Technical Textiles

Cotton Yarn Price Surge Puts Karur Textile Industry Under Pressure

Karur’s home textile industry is facing renewed pressure from a sharp increase in cotton yarn prices. Textile manufacturers in the region source yarn from mills in Coimbatore, Dindigul, Virudhunagar and Vellakoil. According to industry representatives, cotton yarn prices had already increased by around 30 percent to 40 percent during the recent period of geopolitical disruption in West Asia.

The price of high-count yarn rose from about Rs 300 per kg to Rs 400 per kg. After that increase, prices rose by another 10 percent over three weeks, adding to manufacturers’ concerns over operating costs and export competitiveness.

P. Gopalakrishnan, President of the Karur Textile Manufacturers and Exporters Association (KTMEA), said the continued increase was affecting operating costs and putting pressure on relationships between manufacturers and buyers.

Key Highlights

• Cotton yarn prices increased by around 30 percent to 40 percent, according to industry sources.
• High-count yarn rose from approximately Rs 300 to Rs 400 per kg.
• Prices increased by another 10 percent over three weeks, adding further pressure on manufacturers.
• Karur textile manufacturers mainly export to the U.S. and Europe, making cost competitiveness particularly important.
• Other inputs, including polyester, dyeing chemicals, polythene and packaging materials, have also become more expensive amid geopolitical and supply-chain pressures.
• P. Gopalakrishnan said the continued yarn price increase could affect manufacturing costs and buyer-exporter relationships.

Maharashtra Targets Globally Competitive Textile Sector

Maharashtra is working to position itself as a globally competitive textile and export hub by strengthening the entire value chain from farm to international markets. Maharashtra Deputy Chief Minister Eknath Shinde outlined this vision while speaking at the ASSOCHAM Farm to Foreign Conclave 2026 in Mumbai.

Shinde highlighted Prime Minister Narendra Modi’s 5F vision — Farm, Fibre, Factory, Fashion and Foreign — as a framework for connecting textile production with global markets. He pointed to the PM MITRA Park in Nagpur, the Amravati Textile Cluster, and garment clusters in Ichalkaranji, Solapur and Bhiwandi as important parts of Maharashtra’s textile ecosystem.

The state is also focusing on sustainability, digitalization, traceability and global standards.

Key Highlights

• Eknath Shinde said Maharashtra aims to become a globally competitive textile and export powerhouse.
• The state is looking to integrate the textile value chain from farm to foreign markets.
• The PM MITRA Park in Nagpur and textile clusters in Amravati, Ichalkaranji, Solapur and Bhiwandi were highlighted.
• Shinde emphasized a future textile industry that is green, digital, transparent and globally benchmarked.
• Maharashtra is also promoting traditional products such as Paithani sarees and Kolhapuri footwear in international markets.
• A Textile, Craft and Cultural Museum is being developed at the historic India United Mill site in Byculla.
• Textile Committee Secretary and CEO Kartikay Dhanda highlighted sustainability, traceability, textile waste recovery, circularity and alternative fibers as key priorities.

Surat Textile Industry Moves to Address Workers’ Demands

Surat’s textile industry has moved toward resolving several demands raised by workers following labor unrest in the city’s embroidery units. The dispute intensified on August 16, when workers in the Vedant Eco Park area of Amroli forced the shutdown of embroidery units, leading to a clash with police.

Representatives of the state labor department and around 400 textile industrialists later met to discuss workers’ demands. These included a weekly Sunday off or additional wages for working on off days, eight-hour shifts instead of 12-hour shifts, salary payments during the first week of the month and Diwali bonuses.

Industry representatives agreed to several demands, although the eight-hour shift remained unresolved.

Key Highlights

• Workers demanded a weekly off or additional wages for working on Sundays or other off days.
• Other demands included salary payments in the first week of the month and Diwali bonuses.
• Workers also sought an eight-hour daily shift instead of 12 hours.
• Around 400 textile industrialists met state labor officials to discuss the issue.
• Dineshbhai Singara of Ambrotech estate said manufacturers were prepared to negotiate on payment for work on off days and salary payment schedules.
• The eight-hour shift remained a point of disagreement, with industry representatives saying 12-hour shifts were still necessary.
• Police said eight people had been arrested following the unrest, while textile industries were later operating at full strength.

India’s Textile Exports Rise 2.1 percent in FY 2025-26

India’s textile exports recorded steady growth in FY 2025-26, rising 2.1 percent to Rs 3,16,334.9 crore from Rs 3,09,859.3 crore in FY 2024-25, according to data from the Ministry of Textiles reported by DD News.

Ready-made garments remained the largest export category, while man-made textiles and handicrafts also recorded growth. Export expansion was reported across more than 120 markets between April 2025 and February 2026, including the UAE, UK, Germany, Spain, Japan and several African countries.

Government measures, including the extension of RoSCTL and RoDTEP, along with progress on trade agreements, are expected to support exporters and improve India's access to international markets.

Key Highlights

• Total textile exports increased 2.1 percent to Rs 3,16,334.9 crore in FY 2025-26.
• Ready-made garment exports rose 2.9 percent to Rs 1,39,349.6 crore.
• Cotton yarn, fabrics, made-ups and handloom products reached Rs 1,02,399.7 crore, recording 0.4 percent growth.
• Man-made textile exports grew 3.6 percent to Rs 42,687.8 crore.
• Handicrafts, excluding handmade carpets, recorded the strongest growth among value-added segments at 6.1 percent, reaching Rs 15,855.1 crore.
• Export growth was recorded across more than 120 markets between April 2025 and February 2026.
• The government extended RoSCTL and RoDTEP beyond March 2026, while trade agreements with EFTA, the UK, Oman and New Zealand, along with the concluded India-EU negotiations, are expected to support market access.

Conclusion

The latest developments show that India’s textile industry is entering a phase of both expansion and adjustment. Export growth, new trade opportunities and government-backed textile infrastructure are creating room for the sector to strengthen its global position. At the same time, rising cotton yarn prices are squeezing manufacturers, while labor issues in Surat highlight the need for better workforce management and industrial relations.

Sustainability is emerging as another major priority. Initiatives such as the Navi Mumbai recovery facility and Maharashtra’s focus on circularity and traceability indicate a shift toward a more resource-efficient textile value chain. If India can address raw material volatility, labor concerns and sustainability requirements together, the sector can build on its export momentum and become more competitive in global textile markets.