- China's share of US apparel imports has halved over the past decade, leaving around 20% of the US market open to alternative suppliers such as India, Bangladesh, Vietnam, Pakistan, and Indonesia.
- US retail sales rose from ₹5.3 trillion in FY19 to ₹7.2 trillion in FY24, representing a 6% CAGR, while retailers simultaneously reduced inventories.
- The India-UK CETA came into force on July 15, which is expected to improve access to the UK market.
- Nuvama states that India's textile sector is now poised for a bigger global sourcing role as China loses US apparel share.
- The global textile industry is valued at around USD 1.6 trillion and is a mature market growing at only 2.5-3.5% annually.
- Nuvama noted that India's share of the European Union's apparel market has remained at around 3% for the past decade, compared with Bangladesh's 16.7%, indicating considerable room for growth.
- Despite having a large cotton crop and one of the world's biggest spinning bases, India remains heavily dependent on cotton while global fibre consumption has shifted towards man-made fibres (MMF).
- Nuvama cautioned that risks remain, including a reversal of US tariff arrangements, delays in the India-EU FTA, and cotton-price volatility.
India's textile sector is on the brink of a transformative opportunity as global apparel sourcing shifts from China, according to Nuvama Institutional Equities.4
The global textile industry is valued at around USD 1.6 trillion, growing at only 2.5-3.5% annually. Nuvama emphasizes that India's potential lies not in rising demand but in capturing the 20% of the US market that has opened up due to China's declining share, which has halved over the past decade.15
The brokerage notes that India now competes on a more level playing field, with tariff parity and improving trade access. The India-UK CETA, effective from July 15, and ongoing negotiations for an India-EU Free Trade Agreement could unlock significant opportunities for Indian exporters.3
Despite these advantages, challenges remain. India is heavily reliant on cotton, even as global consumption shifts towards man-made fibres (MMF). The country has historically lagged in garment production due to higher labour costs and a fragmented manufacturing structure.7
Nuvama also cautions about potential risks, including a reversal of US tariff arrangements and delays in the EU FTA. However, the recovery in US retail sales, which rose from USD 5.3 trillion in FY19 to USD 7.2 trillion in FY24, could support Indian textile exporters as inventory ratios normalize and ordering activity resumes.28
“Global textiles is a mature ~$1.6 trillion market growing just 2.5-3.5% annually, so India's gains hinge on capturing sourcing shifted from China. Nuvama also flags India's heavy cotton dependence and 3% EU apparel share versus Bangladesh's 16.7% as structural constraints and trade-access opportunities.”
