India’s textile and apparel exports fell 2.95% year-on-year to $8.81 billion in the first quarter of FY27 (April-June 2026), down from $9.08 billion a year earlier, according to an analysis by the Confederation of Indian Textile Industry (CITI). The overall decline masks a split performance: pure textile shipments actually grew 5.19% during the quarter, while apparel exports dropped 12.44%, dragging down the combined total.
The data, released in mid-July 2026, lands just as India’s textile and apparel sector confronts a separate and more severe threat: an additional US tariff of 25%, taking total American duties on Indian textile and apparel goods above 60%. Industry estimates put $2-2.5 billion worth of India-origin stock at risk from the tariff escalation, adding pressure on the same apparel segment that already dragged Q1 FY27 numbers down.
Why Did Apparel Exports Fall While Textile Exports Grew?
CITI’s analysis attributes the divergence to apparel’s greater exposure to price-sensitive, fashion-cycle-driven demand in key buyer markets, which softened during the quarter, while raw textile products such as yarn and fabric benefited from steadier industrial and intermediate demand. Garment exporters, who typically operate on thinner margins and shorter order books than yarn or fabric producers, were also first to feel the impact of buyers front-loading or delaying orders ahead of the anticipated US tariff changes, a dynamic that CITI flagged as compounding the apparel segment’s 12.44% decline.
What Does This Mean for India’s Textile and Apparel Industry?
The mixed Q1 FY27 results arrive as the government and industry bodies push the newly unveiled ‘India Textiles & Apparel CXO Blueprint 2030’, which targets $100 billion in exports by 2030 — a target that now looks harder to reach if the apparel segment’s current weakness persists alongside the US tariff shock. Exporters are increasingly looking to diversify shipments toward the EU, UK, UAE, Oman, Australia and New Zealand under recently signed or under-negotiation trade agreements, a shift that CITI’s data suggests is becoming urgent rather than optional given apparel’s exposure to the US market.
Market Reaction and Industry Response
CITI has called the quarter’s numbers a warning sign for apparel exporters specifically, while noting the textile segment’s 5.19% growth as evidence that India’s raw material and intermediate manufacturing base remains competitive. Industry associations have pressed the government for expedited relief measures for apparel exporters facing the US tariff hike, including possible duty drawback enhancements and faster access to new free-trade-agreement markets. Some exporters have described the current period as a forced pivot moment, using the tariff shock to accelerate diversification plans that were already under discussion at Bharat Tex 2026.
What Happens Next?
CITI and industry bodies are expected to release updated export tracking through Q2 FY27 to gauge whether apparel shipments stabilise as exporters reroute orders to non-US markets. Policymakers are likely to face continued pressure to fast-track EU and UK trade agreement ratification, given the direct link industry groups are drawing between those pacts and the sector’s ability to offset the US tariff impact over the rest of FY27.
Frequently Asked Questions
How much did India’s textile and apparel exports fall in Q1 FY27?
Combined textile and apparel exports fell 2.95% year-on-year to $8.81 billion in Q1 FY27, according to CITI, down from $9.08 billion in the same quarter of FY26.
Did all textile export categories decline in Q1 FY27?
No — pure textile exports (yarn and fabric) grew 5.19% during the quarter, while apparel exports fell 12.44%, meaning the overall decline was driven entirely by the garment segment.
How is the US tariff hike connected to this export data?
Additional US tariffs pushing total duties above 60% are adding further pressure on the same apparel exporters already showing weakness in Q1 FY27, with an estimated $2-2.5 billion of stock at risk.
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