India’s Index of Industrial Production (IIP) or factory output surged 8% year on year in August 2026, yet the country’s textile and garment makers moved in opposite directions.
Textile output climbed 13.1% from a year ago period in the month, whereas apparel production contracted 7.4%, stretching a divide between the upstream and downstream ends of the value chain.
Figures from the Ministry of Statistics and Programme Implementation (MoSPI) said yarn and fabric output rose 11.9% over April-August, while apparel production shrank 5.6% across the same five months.
The ministry noted that 18 of manufacturing’s 23 industry groups expanded year on year during the month.
Under the IIP’s 100-point weighting scheme, textiles carry 3.27 and apparel 1.97. Manufacturing holds 76.062 points, with mining and quarrying, electricity and gas supply, and water supply, sewerage and waste management making up the balance.
Apparel: a choppy twelve months
Monthly IIP releases show the apparel index swinging widely over the past year. Output slipped 2% in September 2025 and 7.3% in October, then rebounded 6.7% in November and by more than 17% in December.
That revival unwound as 2026 began, with apparel falling 8.6% in January and 3.4% in February. March brought a 4.8% rise, but April saw a drop of over 10%, followed by growth of 3.6% in May and 2.3% in June.
The upturn did not last. Production contracted 2.3% in July and 7.2% in August. The latest decline arrived just as industrial output as a whole picked up pace, highlighting the gulf between wider manufacturing and the finished-garment segment.
Textiles traced a different path. Output rose month on month from August to December last year, bar a 7.7% fall in October 2025. It then dropped 5.7% in January and 24.2% in February this year.
A steep rebound followed in March, with production leaping 48%, and the data shows, it holding at that level through August.
The recovery came against a backdrop of geopolitical tension and global trade disruption, which industry representatives cite as influences on the textile and apparel sector.
Two stages, two sets of drivers
A Sakthivel, chairman of the Apparel Export Promotion Council (AEPC), said the diverging trends reflect the fact that the two IIP categories sit at different production stages.
Textiles, he explained, largely span upstream work such as yarn and fabric, where raw-material prices, stock levels and intermediate demand set the pace.
Garments by contrast, is the final value-adding step and is tied more closely to export orders, buyers’ inventories and global retail demand, Sakthivel said.
“Yarn prices have risen lately, he added, and geopolitical and trade uncertainty can shift garment output faster because of its exposure to overseas demand,” BW reported.
Home market and export ambitions
Alongside its export orientation, India’s textile and apparel industry draws on a substantial domestic market. The Ministry of Textiles’ National Household Survey 2024 valued the total textile market at Rs 14.95 trillion, with Rs 12.02 trillion, about 80%, accounted for by domestic consumption.
India aims to lift apparel exports to US $40 billion by 2030 from roughly $16 billion currently. According to the AEPC chairman, the industry is seeking new free trade agreements (FTAs) and wider market access to broaden its customer base as exporters navigate shifting global trade and demand.
The sector is a weighty contributor to the economy. National Accounts Statistics 2025 show textiles and apparel making up about 2% of GDP and 11% of manufacturing gross value added (GVA), on average, across the past three years.
A prolonged contraction in garment manufacturing could hit manufacturing activity, value addition, exports, investment and jobs, Sakthivel warned.
He said the latest IIP readings deserve close monitoring, while pointing to industry efforts to diversify markets and open up new destinations.
Image courtesy: Advance Denim 1
