India textile exporters could gain as global apparel sourcing shifts from China: Nuvama
Nuvama sees an opening for India as China’s share of US apparel imports declines and inventories normalise. The opportunity depends on tariff parity, trade agreements and execution, while MMF capacity, garment scale and cotton-price volatility remain constraints.
What happened
Nuvama Institutional Equities · Nuvama says India’s textile exporters could gain from apparel sourcing shifting away from China, supported by tariff parity,
Key facts
- Global textile market: USD 1.6 trillion
- Global textile growth: 2.5-3.5% annually
- China's US apparel-import share has halved over the past decade
- Around 20% of US apparel market share is contestable
- India's EU apparel-market share: about 3%
- Bangladesh's EU apparel-market share: 16.7%
- US retail sales: USD 5.3 trillion in FY19
- US retail sales: USD 7.2 trillion in FY24
- US retail-sales CAGR: 6%
Why this matters
Strategic buyers should target partnerships or acquisitions that add MMF capabilities, scaled garment manufacturing and US-customer access before the sourcing reallocation accelerates.
What to watch
- Change in China's share of US apparel imports and whether India gains share faster than Bangladesh, Vietnam and Indonesia.
- US or EU tariff changes, trade-agreement progress and rules-of-origin developments affecting Indian apparel landed cost.
- Order-book commentary, capacity utilization and capex announcements from major Indian textile and garment exporters.
- Indian MMF, polyester, viscose and synthetic-yarn capacity additions, plus adoption by garment exporters.
- Cotton-price spreads between India and global benchmarks, along with INR/USD movement and freight costs.
- US apparel inventory-to-sales ratios, retailer promotional intensity and new-order data.
- Evidence that retailers move from test orders to multi-season or strategic sourcing commitments.
- US and European apparel retailers should map China-exposed SKUs by fabric type, margin sensitivity and replenishment speed, then identify where Indian vendors are viable substitutes.
- Importers should run dual-sourcing trials with Indian suppliers for cotton apparel, home-textile-adjacent categories and selected value-added garments before committing core-volume programs.
- Indian exporters should prioritize MMF and technical-textile capacity, garmenting scale, compliance certifications, design support and lead-time reliability rather than competing only on labor cost.
- Retail sourcing teams should negotiate indexed cotton-price mechanisms and currency protections to limit margin shocks from raw-material volatility.
- Brands should use India as part of a multi-country sourcing portfolio, pairing it with nearshore or ASEAN capacity for faster-turn and duty-sensitive categories.