Jefferies Expects Long Growth Cycle for India's Textile Sector
India's textile sector could be entering a growth cycle that lasts for several years. Strategies by global brands to diversify supply chains and shift sourcing away from China are creating significant opportunities for India to boost exports and gain market share. However, according to a Jefferies report, the transition towards man-made fiber (MMF) remains a key structural challenge for the sector.
The report notes that the global textile and apparel market is valued at over $900 billion, with apparel accounting for approximately 60% of the total. India stands to benefit from its integrated fiber-to-fashion ecosystem, an export base of around $37 billion, raw material availability, a skilled workforce, and supportive government policies.
According to Jefferies, improved competitiveness and the restructuring of global supply chains present a multi-year opportunity for India to expand exports and capture market share. However, India's export mix remains heavily reliant on cotton-based products, whereas global demand is rapidly shifting towards MMF apparel, sportswear, and athleisure.
Home textiles are also viewed as an attractive growth segment, accounting for roughly 7–10% of global textile and apparel trade. India holds a significant market share—ranging from 45% to 60%—in key home textile categories like bed linen and towels in the US, while its share in the UK and the European Union stands at approximately 5–25%, indicating ample room for further expansion in these markets.
Free Trade Agreements (FTAs) could also accelerate export growth. The India-UK FTA, set to take effect in July 2026, and the potential India-EU FTA (expected from 2027) could improve India's tariff access to the approximately $220 billion textile and apparel import market.
However, limited FTA coverage, relatively high logistics and compliance costs, low manufacturing capacity, and a weak presence in the MMF segment remain key challenges for India.
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