CITI data show 3–4 per cent decline in textile and apparel exports in January, while Icra says reduced US duties could support recovery in FY2027
India’s textile and apparel exports declined in January 2026 from a year earlier, weighed down by elevated US tariffs that affected competitiveness in one of the country’s largest markets, according to data released by the Confederation of Indian Textile Industry.
Textile exports fell 3.68 per cent year-on-year in January, while apparel exports dropped 3.84 per cent compared with January 2025. In value terms, textile exports stood at USD 1,730.65 million, down from USD 1,796.78 million a year earlier. Apparel exports were recorded at USD 1,544.79 million, compared with USD 1,606.41 million in the same month last year.
Combined exports of textiles and apparel declined 3.75 per cent year-on-year to USD 3,275.44 million in January. The contraction came amid high US reciprocal tariffs that remained in force until February 7, impacting order flows and pricing.
On a cumulative basis, exports of textiles and apparel during April 2025 to January 2026 slipped 0.65 per cent to USD 29,806.70 million, compared with USD 30,002.35 million in the corresponding period a year earlier. While textile exports fell 2.35 per cent to USD 16,677.99 million during the period, apparel exports rose 1.59 per cent to USD 13,128.71 million, indicating relative resilience in garments over the financial year so far.
Segmental Trends
Among key categories, exports of cotton yarn, fabrics, made-ups and handloom products declined 4.15 per cent in January to USD 995.58 million. Jute manufacturing, including floor coverings, fell 18.92 per cent to USD 28.55 million, while carpet exports dropped 12.05 per cent to USD 118.99 million.
Man-made yarn, fabrics and made-ups was the only major segment to post growth, rising 1.01 per cent to USD 430.29 million. Handicrafts excluding handmade carpets fell 2.70 per cent to USD 157.24 million.
Textiles and apparel accounted for 8.96 per cent of India’s total merchandise exports in January, slightly lower than 9.37 per cent a year earlier. Overall merchandise exports rose 0.61 per cent to USD 36,558.89 million.
On the import side, cotton raw and waste imports increased 12.33 per cent year-on-year in January to USD 136.73 million. For April–January, such imports surged 72.36 per cent to USD 1,793.25 million. Imports of textile yarn, fabrics and made-ups declined 2.40 per cent in January but rose 5.30 per cent cumulatively during the financial year period.
Tariff Reset Lifts Outlook
Even as January data reflected the impact of elevated US duties, a subsequent reduction in US reciprocal tariffs to 18 per cent from 25 per cent has improved the outlook for exporters, according to Icra.
The tariff reset, formalised in a recent US-India joint statement, lowers duties from the higher levels seen in 2025. An additional ad valorem duty of 25 per cent on Indian imports, introduced in August 2025, has also been eliminated under an Executive Order issued by the US President. Subject to the conclusion of an Interim Agreement, reciprocal tariffs on select Indian goods could be removed.
Icra said the lower tariffs would particularly benefit labour-intensive sectors such as textiles, seafood, footwear and cut and polished diamonds by improving landed-cost competitiveness in the US market. However, it cautioned that higher export volumes and margin recovery would likely unfold gradually, depending on contract renegotiations and demand trends in the US.
Reflecting the improved tariff environment, Icra has revised its outlook on India’s apparel export sector to Stable from Negative. India’s apparel exports stood at USD 16 billion in FY2025, with the United States accounting for around one-third of the total.
The ratings agency now expects apparel export revenues to contract by a more moderate 3–5 per cent in FY2026, compared with its earlier projection of a steeper fall if high tariffs had continued. Revenues are projected to rebound by 8–11 per cent in FY2027. Operating profit margins, expected to compress by around 200 basis points to about 7.7 per cent in FY2026, are likely to recover to roughly 9.5 per cent in FY2027.
