The global apparel sourcing map is being reshuffled, but India's performance in 2025 tells a story of missed potential. The country's apparel exports grew only 3% year-on-year to $9.72 billion, while Bangladesh surged 10.1% to $31.92 billion. This widening gap highlights structural weaknesses in India's textile industry, including fragmented production, policy inefficiencies, and infrastructure bottlenecks.
Divergent Growth Patterns
India maintained steady growth in cotton woven shirts, dresses, and homewear, but lagged significantly in knitwear compared to Bangladesh and Vietnam. The core issue lies in the lack of large-scale, vertically integrated factories. Most Indian units are small to medium-sized, making them less capable of handling fast-fashion repeat orders. Bangladesh, with its industrial parks and stable labor costs, has become the preferred destination for quick-turnaround orders.
Another critical factor is trade tariffs. India has not yet signed a free trade agreement with the European Union, leaving its exports subject to 9%-12% duties. Bangladesh, as a least developed country, enjoys duty-free access. This gives Indian cotton shirts an 8%-10% price disadvantage in European markets, directly undermining their competitiveness.
Regional Disparities
The slowdown is not uniform across India. The northern cluster around Delhi-Noida, specializing in woven formalwear and outerwear, has been hit hard by weaker European demand, with capacity utilization dropping below 70% in some factories. The western cotton hub in Gujarat also faces pressure from volatile raw material prices.
In contrast, the southern knitwear cluster centered on Tiruppur and Bengaluru has shown resilience. Specializing in T-shirts, sportswear, and innerwear, these factories have maintained steady orders from the U.S. market. Leading units have adopted automated cutting lines and overhead conveyor systems, cutting delivery times to under 25 days—close to Bangladesh's benchmark. This suggests that India's problem is not a lack of capability but a need for more integrated clusters like Tiruppur.
Implications for Chinese Buyers
India's sluggish export growth presents both challenges and opportunities for Chinese sourcing professionals. In the short term, India remains a vital source for cotton shirts and home textiles, especially in high-count fabrics and hand-embroidery. However, buyers should note that delivery reliability has declined in 2025 due to slower port clearance and inland transport delays.
Looking ahead, India's production-linked incentive scheme is expected to cover apparel, and free trade talks with the UK and EU are accelerating. If tariff barriers fall, India's advantages in cotton textiles and sustainable production could be fully realized. Buyers would be wise to identify Indian factories that are GOTS-certified and have wastewater treatment facilities—these will be well-positioned in the green supply chain of the future.