Textile output surges, but apparel production stays in the red. What’s driving the divergence?
Government data reveals growth of 8 percent in industrial output for August 2026, driven by manufacturing. Apparel production, however, declined by 7.4 percent in the same month, indicating ongoing challenges. In contrast, the textile industry has shown strong growth of 13.1 percent, signaling a divergence in trends. Experts suggest that upcoming festive seasons could boost demand for apparel…
India's industrial output data in August 2026 demonstrated a robust 8% growth, driven by the overall manufacturing sector's performance. However, apparel production witnessed a contraction of 7.4% in the same month, marking a cumulative year-on-year decline of 5.6% during the April-August period. The underlying cause of this divergence lies in the fact that the IIP index measures different stages of production.
Textile manufacturing, which forms the base for apparel production, covers upstream segments such as yarn and fabric, while wearing apparel is the final, value-added stage, more directly influenced by export orders and global retail demand. Recent geopolitical uncertainties and tariff fluctuations have led to a more rapid response of apparel production to external demand fluctuations.
Despite the contraction, the Indian textile and apparel industry retains a strong domestic demand base and aims to increase apparel exports to USD 40 billion by 2030. The sector's resilience is being bolstered by diversification across new free trade agreements and expanding market access, along with the upcoming festive season's potential to support demand.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
