When the fabric booms, but garments don’t
New Delhi - Despite robust industrial growth in August, India's apparel production contracted by 7.4 percent, according to the government's industrial output data. This decline, while the broader manufacturing sector expanded, highlights a widening gap between upstream textile industry performance and downstream apparel manufacturing.
The Index of Industrial Production (IIP) revealed that overall growth in August stood at 8 percent, up from 6.7 percent in the previous month. However, the wearing apparel sector, a key export indicator, saw a 5.6 percent year-on-year decline from April to August. In contrast, textile production grew by 13.1 percent in August and 11.9 percent year-to-date.
A Sakthivel, Chairman of the Apparel Export Promotion Council, explained that the divergence stems from the different stages of production covered by the two indices. Textile manufacturing focuses on upstream segments like yarn and fabric, while apparel is the final, value-added stage more directly tied to global demand.
India's textile and apparel industry relies on strong domestic demand, accounting for 80 percent of the market value. The government aims to boost apparel exports to $40 billion by 2030 from the current $16 billion.
While the IIP numbers warrant close monitoring, they reflect the industry's adjustment to global conditions rather than a broad-based downturn. Apparel exports declined 9.1 percent from April to August 2026-27, but the pace of decline has slowed. New free trade agreements and expanding market access provide opportunities for diversification, and the large domestic market, especially during festive seasons, offers additional support.
Experts believe apparel manufacturing will regain momentum, contributing positively to India's economic growth, despite the challenges.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
