Textile production rose 13.1 per cent in August, while apparel output fell 7.4 per cent, highlighting a widening gap between upstream manufacturing and finished-garment production
India’s industrial production grew 8 per cent in August 2026, but textile and wearing-apparel manufacturing moved in opposite directions. Textile producation rose 13.1 per cent during the month, while apparel output declined 7.4 per cent, extending a divergence between the upstream and downstream segments of the industry.
Data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that Index of Industrial Production (IIP) growth accelerated to 8 per cent in August from 6.7 per cent in July. Within manufacturing, 18 of the 23 industry groups recorded year-on-year growth during August, according to the ministry.
Textile production also recorded cumulative growth of 11.9 per cent during April-August of the current financial year. Wearing-apparel output, in contrast, declined 5.6 per cent cumulatively during the same period, indicating that the weakness in finished garments has persisted despite stronger production in the upstream textile segment.
Textiles and wearing apparel carry weights of 3.27 and 1.97, respectively, in the IIP’s overall 100-point weighting. Manufacturing accounts for 76.062 points, while mining and quarrying, electricity and gas supply, and water supply, sewerage and waste management account for the remaining weight in the index.
Apparel Output Remains Volatile
The wearing-apparel index has shown considerable fluctuations over the past year. Production declined 2 per cent in September 2025 and 7.3 per cent in October before recovering 6.7 per cent in November and more than 17 per cent in December, according to the monthly IIP data.
The recovery reversed at the beginning of 2026, with apparel production falling 8.6 per cent in January and 3.4 per cent in February. Output increased 4.8 per cent in March but declined more than 10 per cent in April, before returning to growth of 3.6 per cent in May and 2.3 per cent in June.
The improvement was short-lived, with wearing-apparel production declining 2.3 per cent in July and 7.2 per cent in August. The latest fall came even as overall industrial production accelerated during the month, underscoring the difference between the performance of the broader manufacturing sector and the finished-apparel segment.
Textile production followed a different trajectory during the period. The sector recorded month-on-month growth between August and December last year, except for a 7.7 per cent decline in October 2025. Production then fell 5.7 per cent in January and 24.2 per cent in February this year.
The textile segment recovered sharply in March, when production increased 48 per cent, and remained at that level through August, according to the data provided. The recovery took place amid the geopolitical situation and global trade disruptions cited by industry representatives as factors affecting conditions in the textile and apparel industry.
A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC), said the different trends reflected the fact that the two IIP categories represent separate stages of production. He said textiles largely cover upstream activities such as yarn and fabric, where production is influenced by raw-material prices, inventory and intermediate demand.
Sakthivel said wearing apparel represents the final value-added stage and is more directly linked to export orders, buyer inventories and global retail demand. He added that yarn prices had increased recently, while geopolitical and trade uncertainties could result in faster changes in apparel production because of its exposure to external demand.
Domestic Market, Export Ambitions
India’s textile and apparel industry has a sizeable domestic market alongside its export orientation. The Ministry of Textiles’ National Household Survey 2024 estimated the overall textile market at Rs 14.95 trillion, of which the domestic market accounted for Rs 12.02 trillion, or roughly 80 per cent.
India is targeting apparel exports of USD 40 billion by 2030, compared with around USD 16 billion currently. The industry is also seeking to diversify markets through new free trade agreements (FTAs) and expanded market access, according to the AEPC chairman, as exporters contend with changing global trade and demand conditions.
The sector accounts for a significant share of India’s economic activity. According to the National Accounts Statistics 2025, textiles and apparel accounted for around 2 per cent of the country’s GDP and 11 per cent of manufacturing gross value added (GVA), on average, over the last three years.
Sakthivel said a prolonged contraction in apparel manufacturing could affect manufacturing, value addition, exports, investment and employment. He also said the current IIP numbers warranted close monitoring, while describing the industry’s efforts to diversify markets and expand access to new destinations.
Apparel exports declined 9.1 per cent during April-August 2026-27, reflecting the challenging global environment. According to Sakthivel, the pace of decline has moderated in recent months, while the industry is also looking towards the upcoming festive season for demand support.
The industry expects new FTAs and wider market access to provide opportunities for diversification, while the domestic market offers an additional demand base. Apparel manufacturers and exporters are also looking towards overseas festive and Christmas orders as they assess demand conditions for the coming months.
Industry Sees Cyclical Slowdown
Sharad Saraf, a Mumbai-based exporter and CMD of Technocraft Industries, described the slowdown in manufacturing as cyclical and expected growth to improve within two to three months. He said the company was currently working on Christmas orders, pointing to continuing activity in the export market.
Saraf, who also has a textile unit in Amravati, Maharashtra, said manufacturing units require skilled workers on a permanent basis. He added that companies need to hire additional workers depending on their order books, with workforce requirements changing according to the level of production and orders.
The IIP data thus show a clear divergence between textile and wearing-apparel production during the first five months of the financial year. While textile output has recorded strong growth after its sharp declines earlier this year, apparel production remains below its year-ago level, with exporters looking towards upcoming orders and market diversification.
(With input from agency)
