India's Index of Industrial Production (IIP), released by the Ministry of Statistics and Programme Implementation (MoSPI), shows that in August 2026 India's overall industrial output grew 8% year-on-year, higher than July's 6.7%; 18 of the 23 manufacturing industry groups achieved positive growth. However, "apparel manufacturing," a bellwether for exports, contracted 7.4% year-on-year that month, and fell 5.6% cumulatively from April to August of this fiscal year; upstream textiles grew 13.1% and 11.9% over the same periods, respectively, showing a clear divergence between upstream and downstream trends.

Key points

  • In August 2026, India's overall industrial output grew 8%, apparel manufacturing shrank 7.4%, and textiles grew 13.1%.
  • From April to August of this fiscal year, apparel manufacturing fell 5.6% cumulatively, while textiles grew 11.9% cumulatively.
  • Apparel exports fell 9.1% in the first five months of this fiscal year, and India aims to raise apparel exports from about US$16 billion to US$40 billion by 2030.

In the IIP's 100-point weighting, textile production accounts for 3.27 points and apparel for 1.97 points, with manufacturing as a whole accounting for 76 points, while mining, electricity and gas, water supply and sewage management, and others together account for the remaining 24 points. A Sakthivel, chairman of the Apparel Export Promotion Council (AEPC), explained that the two indices cover different production stages and need not move in sync with overall industrial output: textile manufacturing mainly covers upstream segments such as yarn and fabrics, and is affected by raw material prices, inventories and intermediate demand, for example the recent marked rise in yarn prices; apparel is the final value-added segment and is more directly tied to export orders, buyer inventories and global retail demand, so it reacts faster to changes in external demand amid the current geopolitical and trade uncertainty.

In terms of monthly trends, apparel manufacturing has been highly volatile: it fell 2% last September and more than 7.3% in October, rebounded 6.7% in November and grew more than 17% in December; it plunged 8.6% this January and fell another 3.4% in February, rose 4.8% month-on-month in March, fell more than 10% again in April, grew 3.6% and 2.3% in May and June respectively, and contracted again by 2.3% and 7.2% in July and August. Textile production has been relatively stable, growing month by month from last August to December except for a one-off 7.7% drop in October 2025; this year it fell significantly only in January (5.7%) and February (24.2%), rebounded sharply by 48% in March and remained stable thereafter through August, during which the Strait of Hormuz situation and global trade disruptions did not cause it obvious shocks.

In terms of macro share, according to the National Accounts Statistics 2025, the textile and apparel industry accounts for about 2% of India's GDP and has averaged about 11% of total manufacturing gross value added (GVA) over the past three years. Sakthivel pointed out that the continued contraction in apparel manufacturing could affect manufacturing, value added, exports, investment and employment, and in turn weigh on overall economic activity. Industry data show that India's apparel exports fell 9.1% from April to August of this fiscal year, reflecting a difficult global environment, but the decline has narrowed somewhat in recent months. He said the industry is actively diversifying markets through newly signed free trade agreements (FTAs) and expanded market access, the upcoming festive season is expected to support demand, and the current IIP data deserve close attention, but it should be seen more as an adjustment by a value-added industry deeply integrated into the global economy in response to market changes rather than a broad deterioration across the entire industry.

Despite the pressure, apparel manufacturers and exporters are still betting on overseas festive demand and expect sales to recover in the coming months. Sharad Saraf, a Mumbai exporter and chairman and managing director of Technocraft Industries, said manufacturing growth is slow but cyclical and will accelerate within two to three months, adding, "We are currently taking Christmas orders." He also noted that manufacturing units need long-term skilled workers and must hire additional staff from time to time depending on orders.

Source: India's industrial output flags gap between textiles, apparel manufacturing · Originally published on 2026-10-04