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Trade Watch July-September (Q2) FY25 1 July-September (Q2) FY25
TRADE WATCH
QUARTERLY Trade Watch July-September (Q2) FY25 3
July-September (Q2) FY25
TRADE WATCH
QUARTERLY Trade Watch July-September (Q2) FY25 4 FOREWORD Trade Watch July-September (Q2) FY25 7
FOREWORD Trade Watch July-September (Q2) FY25 8 Trade Watch July-September (Q2) FY25 i
ADVISORY BOARD
S. No.Board MemberAffiliation
1 Harsha Vardhana Singh Former Executive Director, Brookings India
2 Santosh Kumar Sarangi Additional Secretary & Director General, DGFT
3 Pravin Krishna Professor, Johns Hopkins University
4 Rupa ChandaDirector, UNESCAP
5 Deepak Mishra Director and Chief Executive, ICRIER
6 Rakesh Mohan Joshi Professor and Chairperson, IIFT, Delhi
7 Arpita Mukherjee Professor, ICRIER
8 James J. Nedumpara
Professor and Head, Centre for Trade and
Investment Law (CTIL)
9 Pritam Banerjee Professor and Head, Centre for WTO Studies
10 C VeeramaniDirector, Centre for Development Studies
11 Sanjay Kathuria Visiting Senior Fellow, CSEP
12 Biswajit NagProfessor, IIFT
13 Debashis Chakraborty Professor, IIFT, Kolkata Trade Watch July-September (Q2) FY25 ii
Executive Summary
International trade plays a vital role in a country’s economic growth, providing access
to new markets, driving industrial development, and enhancing competitiveness.
Trade Watch Quarterly serves as a quarterly assessment, offering a snapshot of
India’s trade performance, highlighting trade direction and composition along with
a thematic analysis. Given the geopolitical uncertainties, this edition also assumes
particular significance, providing a concise analysis of key developments shaping
trade dynamics.
The composition of exports has remained largely stable this quarter compared to
Q1, with the top 10 sectors unchanged. However, y-o-y export growth varies across
sectors, with mineral fuels and iron & steel experiencing significant declines, including
in volume. On the imports side, copper and its articles have entered the top 10 sectors
this quarter, driven by a 28% y-o-y increase, attributed to economic expansion in
construction and infrastructure.
Regionally, North America and the EU continue to account for around 40% of total
exports, maintaining their position from the previous quarter. Similarly, Northeast Asia
and West Asia remain key import sources, contributing to approximately 40% of total
imports. Notably, gold imports have driven import growth from West Asia.
For this quarter, the publication assesses the competitiveness of the textile sector.
India’s textile sector plays a crucial role in the country’s industrial output, employment,
and exports, contributing 5% to total exports and amounting to $34.2 billion in 2023.
Despite being one of India’s oldest industries, its share in global trade remains modest
at 4%, making it the sixth-largest textile and apparel exporter. India holds strong
competitiveness in natural fiber-based textiles, particularly cotton and carpets, but
faces challenges in apparel exports and other technical textiles, where Bangladesh
and Vietnam have outpaced it.
India has a moderate presence in man-made textiles but lags in high-value technical
textiles, a segment dominated by China, Germany, and South Korea. Although India’s
participation in global textile value chains has grown, the sector must undergo urgent
reforms in supply chain integration, cost efficiency, and sustainability compliance to
stay competitive in the global market. Trade Watch July-September (Q2) FY25 iii
HIGHLIGHTS
1. India’s total trade grew by 5.67% in April–September 2024 compared to the same
period in 2023, with exports rising 5.23% and imports increasing 6.07% year-on-
year.
2. India’s merchandise exports have remained stable, averaging $35.4 billion per
month over the past six months, while imports averaged $57.8 billion, except for a
surge in August. Year on year fluctuations remain aligned with Q1 levels.
3. India’s exports composition remains stable, with a drop in mineral fuels; copper
entered the top ten imports due to rising infrastructure demand.
4. USA, UAE, and the Netherlands continue to be India’s leading export markets,
accounting for 33% of total exports, with the Netherlands’ growth driven by
smartphones and petroleum; the top five markets remain stable.
5. China, UAE, and Russia continue to lead imports; UAE imports surged due to gold
demand, while crude imports from Russia, Iraq, and Saudi Arabia slowed.
6. India has scope to strengthen its presence in major global trade regions, as it
currently accounts for only 8% of its trade in regions that make up 77% of world
trade, presenting opportunities for growth in high-value markets.
7. Merchandise trade deficit with FTA partners rose to $26 billion; exports to Japan
grew by 30% on smartphone shipments, while UAE imports jumped 48% due to
gold demand.
8. India ranks 6th in global textile exports, but its basket remains skewed towards
natural fibers with a strong presence in cotton and carpet threads.
9. Global textile exports are moving towards manmade and technical textiles, while
India’s focus remains on natural fibers and apparel, with a declining share in the
latter.
10. India’s GVC participation in the textile sector is concentrated in intermediate and
primary inputs (such as cotton, wool, and silk), reflecting a limited presence in
high-value downstream products. Trade Watch July-September (Q2) FY25 iv Trade Watch July-September (Q2) FY25 v
Contents
A. India’s Trade Analysis��1
1. Merchandise and Services Analysis��2
2. Compositional Analysis��3
3. Trade Direction��5
4. Regional Analysis��6
5. India’s Trade Presence Across Key Global Regions in 2023��8
6. Merchandise Trade with FTA Partners��9
B. Thematic Analysis: Textile Sector��11
1. Analyzing peer presence in exports of textile and clothing��15
2. Mapping of India’s Textile Exports with Global Demand and Supply��17
3. India’s presence in the Global Value Chain for Textiles��19
4. Evolving trends in India’s Textile Exports��21
5. Recent Developments in India’s Trade Policies: Key Updates for the Textile Sector
��22
6. Key Insights on India’s Textile Trade��24
C. Geopolitical Factors Impacting Global Trade��25
1. Geopolitical Developments��26
2. Commodity Price Trends��27 Trade Watch July-September (Q2) FY25 1
A. INDIA’S TRADE ANALYSIS Trade Watch July-September (Q2) FY25 2
A. India’s Trade Analysis
Global trade exhibited a steady recovery in the first half of FY25, with both merchandise
and services trade showing positive momentum. Merchandise trade volumes
expanded by 1.5% from April to July compared to the same period in 2023. This upward
trend continued in the services trade, where from July to September 2024 overall
service trade values increased by 8.0% year-on-year, reinforcing the resilience of global
trade dynamics.
India’s total trade performance showed a y-o-y improvement in the first half of FY25.
During this period, total trade amounted to $839 billion, reflecting a y-o-y increase of
5.67%. Exports rose by 5.23% y-o-y to reach $395 billion, while imports grew by 6.07%,
reaching $445 billion. (Figure 1).
Figure 1: Trade performance in the H1 of FY255.67% 5.23%6.07%
0%
2%
4%
6%
8%
0
200
400
600
800
1000
Total Trade Export Import
USD Billion
Apr-Sep 2023 Apr-Sep 2024 Change % (RHS)
Source: Department of Commerce, MoC&I, GOI
1. Merchandise and Services Analysis
In September 2024, exports and imports declined y-o-y by 0.3% to $34.3 billion and
0.9% to $54 billion respectively (Figure 2). The imports increased steadily from $56.8
billion in July to $62.5 billion in August. In Q2 FY25, exports averaged $34.2 billion per
month, remaining relatively stable, while imports experienced fluctuations. Exports
declined by 4.3% y-o-y to $103 billion, primarily due to a decline in mineral fuel and
oil shipments, while imports rose by approximately 2% to $173.5 billion, driven by
increased gold purchases. (Figure 3)
Figure 2: Merchandise Trade (Monthly) Figure 3: Merchandise Trade (Quarterly) -0.27%
-0.88%
-1.1%
-0.5%
0.0%
0
20
40
60
Sept (EX) Sept (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
-4.27%
1.85%
-6%
-4%
-2%
0%
2%
4%
-
50
100
150
200
Q2 (EX) Q2 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
Source: Department of Commerce, MoC&I, GOI Trade Watch July-September (Q2) FY25 3
India’s monthly services exports reached nearly $32 billion in September 2024, reflecting
a 14.6% y-o-y increase, while imports amounted to approximately $16.5 billion, marking
a similar growth rate of around 14%. In Q2 FY25, services exports rose by 12.14% to $93.5
billion, while imports increased by 12.89% to $48.7 billion, contributing to a surplus of
$44.8 billion. The y-o-y growth rate of services exports accelerated from 10.09% in Q1
FY25 to 12.14% in Q2 FY25, while services imports grew from 9.09% to 12.89%.
Figure 4: Services Trade (Monthly) Figure 5: Services Trade (Quarterly) 14.60%13.15%
0%
3%
6%
9%
12%
15%
-
5
10
15
20
25
30
35
Sept (EX) Sept (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
12.14%
12.89%
0%
2%
4%
6%
8%
10%
12%
14%
-
20
40
60
80
100
Q2 (EX) Q2 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)

Source: Department of Commerce, MoC&I, GOI
Overall, in H1 FY25, the merchandise trade deficit was greater than the services trade
surplus, leading to an increase in the total trade deficit to $54.9 billion, up from $44.2
billion y-o-y.
2. Compositional Analysis
Merchandise Exports
In Q2 FY25, the leading export commodities
1
were mineral fuels (16.1%), electrical
machinery and equipment (8.2%), and nuclear reactors (8.2%) (Figure 6). However,
steep y-o-y declines were noted in sectors such as mineral & related fuels, natural
and cultured pearls, iron & steel and cereals dropping by 30%, 18% 17.2% and 10.3%
respectively. (Figure 7).
The decline in mineral fuels exports, primarily driven by motor fuels, was due to reduced
order volumes from European countries including France, Romania, Turkey, Portugal,
and Italy. Exports of electrical machinery and parts experienced growth, supported
by robust smartphone sales, which accounted for 42% of the category’s exports this
quarter. Meanwhile, inflationary pressures on cereals prompted export restrictions
on agricultural products such as non-basmati rice, dampening overall cereal export
performance. Also, the exports of natural and cultured pearls (HS 71) declined due
to reduced shipments of cut and polished diamonds, which are facing increased
competition from lab-grown diamonds.
1
Leading commodities are the top ten commodities with the highest value share in exports. Trade Watch July-September (Q2) FY25 4
Figure 6: Composition of Exports16.1%
8.2%
8.2%
6.5%
5.7%
5.6%
4.7%
2.4%
2.3%
2.2%
0% 5% 10% 15% 20%
Mineral & related fuels
Electrical machinery & parts
Nuclear reactors, boilers & parts
thereof
Natural, cultured pearls & precious
stones
Pharmaceutical products
Vehicles other than railways & parts
Organic chemicals
Articles of iron or steel
Cereals
Iron and steel
Source: Department of Commerce, MoC&I, GOI
Figure 7: Y-o-Y Q’2 Exports
-29.9%
12.7%
8.2%
-17.7%
8.9%
6.3%
0.1%
-1.8%
-10.3%
-17.2%
-40%-30%-20%-10%0% 10%20%
Mineral & related fuels
Electrical machinery & parts
Nuclear reactors, boilers & parts thereof
Natural, cultured pearls & precious?
Pharmaceutical products
Vehicles other than railways & parts
Organic chemicals
Articles of iron or steel
Cereals
Iron and steel
Source: Department of Commerce, MoC&I, GOI
Merchandise Imports
The leading
2
imports for this quarter include mineral fuels (26%), natural and cultured
pearls (12.9%), electric machinery (14.5%) and nuclear reactors (9.6%). The increase in
imports was driven by a y-o-y rise of 28% in copper and related articles, 14% in natural
and cultured pearls, followed by a 10% increase nuclear reactors. Imports in the natural
and cultured pearls category were primarily driven by gold, which accounted for 74% of
the total imports in this category. In August 2024, gold imports peaked at $8.6 billion,
marking a month-on-month increase of 243% from $2.5 billion. This sharp rise can be
attributed to a reduction in customs duty and heightened festival demand.
3
Copper
imports also witnessed a surge, driven by overall economic growth and a decline in
domestic copper production due to smelter closures and quality issues.
2
Leading commodities are the top ten commodities with the highest value share in imports.
3
https://www.ptinews.com/story/business/gold-imports-doubled-to-record-high-of-usd-10-06-bn-in-au-
gust/1826752 Trade Watch July-September (Q2) FY25 5
Figure 8: Composition of Imports25.9%
14.5%
12.9%
9.6%
4.0%
3.4%
2.7%
2.6%
2.0%
1.7%
0%5%10%15%20%25%30%
Mineral & related fuels
Electrical machinery & parts
Natural, cultured pearls &
precious stones
Nuclear reactors, boilers & parts
thereof
Organic chemicals
Plastic & articles thereof
Iron and steel
Animal & veg oil and fats
Optical/ Medical/Surgical
Instruments & parts
Copper and articles thereof
Source: Department of Commerce, MoC&I, GOI
Figure 9: y-o-y Q’2 Imports -8.5%
9.5%
14.3%
10.3%
-8.8%
-1.3%
4.7%
-7.7%
7.0%
28.1%
-20% -10% 0% 10% 20% 30%
Mineral & related fuels
Electrical machinery & parts
Natural, cultured pearls & precious
stones
Nuclear reactors, boilers & parts
thereof
Organic chemicals
Plastic & articles thereof
Iron and steel
Animal & veg oil and fats
Optical/ Medical/Surgical Instruments
& parts
Copper and articles thereof
Source: Department of Commerce, MoC&I, GOI
3. Trade Direction
Merchandise Exports
India’s exports to its top markets
4
(USA, UAE, Netherlands, UK, China, Singapore)
remained stable, accounting for about 42% of Q2 FY 25 exports. Positive export growth
was recorded in five out of the top ten economies. However, declines were recorded
with Singapore (-19%), Australia (-18.6%) due to decline in automotive diesel exports,
and China (-16%) compared to Q2 FY24. (Figure 10). Exports to the top ten markets
showed a marginal y-o-y increase of 0.3%.
The Netherlands has emerged as India’s third-largest export destination, with petroleum
products, including diesel and aviation turbine fuel, leading the export basket. In
the electronics category, smartphone shipments have been particularly prominent,
contributing to the Netherlands becoming a key market for Indian smartphones.
4
Top markets are those that account for the top 10 shares of total exports in Q2 FY25. Trade Watch July-September (Q2) FY25 6
Figure 10: India’s exports to major destinations-20%
-10%
0%
10%
20%
30%
0
4
8
12
16
20
USD Billion
Q2 FY24 Q2 FY25 % Y-o-Y Growth Q2 (RHS) % share in India's exports Q2'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
Merchandise Imports
India’s share of imports from its top markets
5
- China, Russia, UAE, USA remained stable,
making up nearly 41% of total imports. In Q2 FY25, India recorded significant y-o-y
import growth with UAE (49%), on account of gold and crude imports experiencing
a y-o-y increase of 108%, Switzerland (8.03%) and China (+14%) due to imports in
electronic machinery and nuclear reactors, boilers and parts. However, import growth
declined with Saudi Arabia (-25.71%), Russia (-7.76%) and USA (-4%). (Figure 11)
Figure 11: India’s imports from major destinations-30%
-10%
10%
30%
50%
0
5
10
15
20
25
30
35
USD Billion
Q2 FY24 Q2 FY25 % Y-o-Y Growth Q2 (RHS) % share in India's imports Q2'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
4. Regional Analysis
Merchandise Exports
India’s Q2 FY25 exports reveal a mixed performance across regions. Exports were
primarily directed towards North America, the EU, West Asia (GCC), and ASEAN
accounting for 52% of total exports. While North America, EU countries, and West Asia
showed steady growth, regions like ASEAN, NE Asia, and West Africa faced declines in
exports. India’s exports to the top three Latin American countries—Brazil, Colombia,
and Chile—recorded y-o-y growth of over 21%.
5
Top markets are those that account for the top 10 shares of total imports in Q2 FY25 Trade Watch July-September (Q2) FY25 7
Figure 12: Region-Wise y-o-y (%) Q’2 Exports growth
61.56%(21.4%)
0.35%(17.6%)
4.16%(12.5%)
-9.56%(9.1%)
-11.12%(8.2%)
-0.84%(5.6%)
-17.45%(4.5%)
6.15%(3.7%)
-15.86%(2.8%)6.09%(2.5%)
-18% -13% -8% -3% 2% 7% 12%
North America
EU Countries
West Asia- GCC
ASEAN
NE Asia
South Asia
Other European Countries
Latin America
West Africa
East Africa
Source: Department of Commerce, MoC&I, GOI
Similarly, in East Africa, countries like Tanzania, Kenya, Mauritius, Réunion, and Comoros
also saw y-o-y growth exceeding 10%. This notable export growth signals potential new
opportunities in these markets. However, export slowdowns were observed in West
Africa (-16%), Other European countries (-17%) and Northeast Asia (-11%). (Figure 12).
Regions like Latin America and East Africa, despite having lower shares in overall trade,
recorded strong YoY growth of over 6%, indicating emerging potential. In contrast,
high-share regions such as North America, EU and West Asia experienced export
growth averaging 2%
Merchandise Imports
India’s imports mainly came from Northeast Asia, West Asia (GCC), and ASEAN
accounting for 56% of total imports in Q2 FY25. NE Asia dominated imports, growing
by 9% y-o-y. West Asia (GCC) showed the highest growth at 16.63%, contributing 16% to
total imports. ASEAN, while at the share of 12.26%, saw a slight decline of 1.3%.
Notable import growth was observed in West Asia (GCC), particularly from the UAE, at
16.63%, European Free Trade Association (7.12%). However, major markets like the EU
(-14.18%) and North America (-3%) experienced contractions, alongside sharp declines
in East Asia (Oceania) (-19.59%) particularly with New Zealand and Other West Asia
(-16.21%). (Figure 13)
Figure 13: Region-Wise y-o-y (%) Q’2 Import growth
79.01%(28.3%)
16.63%(15.8%)
-1.33%(12.2%)
-7.23%(8.1%)
-14.18%(8%)
-3.01%(7.1%)
-16.21%(3.7%)
6.86%(3.4%)
7.12%(3.2%)
-19.59%(2.1%)
-30%-10%10%30%
NE Asia
West Asia- GCC
ASEAN
Other CIS Countries
EU Countries
North America
Other West Asia
Latin America
European Free Trade Association (EFTA)
East Asia (Oceania)
Source: Department of Commerce, MoC&I, GOI
6
Export share of the region in India’s total exports is mentioned in the figure in parenthesis
7
Import share from the region in India’s total imports is mentioned in the figure in parenthesis Trade Watch July-September (Q2) FY25 8
5. India’s Trade Presence Across Key Global Regions in 2023
8
India’s trade distribution varies across global regions, with stronger engagement in
neighboring and emerging markets. Though major trade hubs like the EU, Northeast
Asia, and North America dominate global trade, India’s share in these regions remains
modest.
Table 1: India’s Trade Share Across Global Regions 2023
Sr.NoRegion
Region’s Trade
Share in the World
9
India’s Trade Share
in the Region
10
1 EU Countries30.5%0.9%
2 NE Asia22.1%2.0%
3 North America16.6%1.8%
4 ASEAN7.8%2.9%
5 Other European Countries 4.5%1.6%
6 Latin America3.5%3.8%
7 West Asia - GCC4.3%5.9%
8 EFTA Countries1.4%3.2%
9 Other CIS Countries 1.9%8.4%
10East Asia (Oceania) 1.7%3.7%
11Other West Asia1.3%8.1%
12North Africa1.0%2.8%
13West Africa0.8%6.9%
14South Asia0.6%11.1%
15East Africa0.4%13.6%
16
Southern African Customs
Union (SACU)
0.5%8.8%
17CARs Countries0.5%0.7%
18Central Africa0.2%3.6%
19Other South African Countries0.2%10.2%
20Unspecified0.1%0.4%
Source: ITC Trade Map
The EU, Northeast Asia, North America, and ASEAN account for 77% of global trade
and 74% of global imports, yet India’s trade with these regions is only 8%, and it caters
to just 6% of their import demand. India’s exports of key commodities—electrical
machinery, mineral fuels, and nuclear reactors and mechanical appliances aligning
with the region’s top global imports
11
, where China and the U.S. are key competitors,
with China being the leading supplier for electrical machinery and nuclear reactors.
India’s share remains low at 1–2% of these import baskets. The top regions also
contribute 73% of global exports, and India sources about 9% of its imports from them.
8
For this analysis, the latest available data is for 2023
9
The region’s trade share refers to the sum of its exports and imports as a proportion of total global exports
and imports
10
India’s trade share refers to the sum of its exports and imports as a proportion of total global exports and
imports
11
Key commodities pertain to the HS-2 level Trade Watch July-September (Q2) FY25 9
In contrast, India holds a 44% trade share with South Asia, East Africa, and Southern
Africa—regions that account for just 2% of global trade. Top imported commodities
12

of these regions are mineral fuels and nuclear reactors with India’s key exports to these
regions include natural and cultured pearls and mineral fuels, where Russia and UAE
are the leading competitors for mineral fuels.
India’s trade has expanded more in neighbouring and emerging markets—South
Asia (11.1%), East Africa (13.6%), and West Africa (6.9%)—than in global trade hubs. For
instance, while the EU alone accounts for 30.5% of global trade and 29% of import and
export demand, India’s trade with the region is around 1%, reflecting underutilised
potential.
6. Merchandise Trade with FTA Partners
In Q2 FY25, exports to FTA countries totalled $37.4 billion, reflecting a 4% y-o-y
decline. Key regions like ASEAN (-10%), Singapore (-19%), and Australia (-19%) saw
notable declines, which contributed to the overall drop. However, there was growth
in exports to Japan (31%), Bhutan (22%) and Sri Lanka (11%) highlighting opportunities
in these markets. Despite underperformance from major partners, smaller markets
demonstrated high growth potential.
Figure 14: Exports- FTA Countries-30%
-20%
-10%
0%
10%
20%
30%
40%
0
2
4
6
8
10
12
USD Billion
4?)<4)<\R\FKDQJHLQ4)<RYHI4)<5+6
Source: Department of Commerce, MoC&I, GOI
Figure 15: Imports- FTA Countries-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
0
5
10
15
20
25
USD Billion
4?)<4)<\R\FKDQJHLQ4)<RYHI4)<5+6
Source: Department of Commerce, MoC&I, GOI
12
Key imports pertain to the HS-2 level Trade Watch July-September (Q2) FY25 10
In Q2 FY25, imports from FTA countries grew by 5% y-o-y, reaching $64.3 billion. UAE
led the growth with a significant 48% increase, driven by strong demand for key
commodities. Japan (11.3%), Thailand (26%), and Mauritius (30%) also demonstrating
high import growth. However, key partners like Malaysia (-34%), Australia (-20%),
and Sri Lanka (-17%) experienced sharp declines. While overall imports increased,
performance varied across regions, with strong gains in selected markets offsetting
declines in others. Overall, in Q2 FY25, trade with FTA partners resulted in a deficit of
$26.7 billion, marking a 23% y-o-y increase. Trade Watch July-September (Q2) FY25 11
B. THEMATIC ANALYSIS:
TEXTILE SECTOR Trade Watch July-September (Q2) FY25 12
B. Thematic Analysis: Textile Sector
India’s textile and apparel exports have remained stagnant at approximately $40
billion for the past six years, growing at just 0.8% annually, which is significantly lower
than the global growth rate of 3.5%. This gap highlights the missed opportunity
for India in a critical sector. Structural inefficiencies, such as fragmented industrial
clusters, a dispersed value chain, low compliance with global standards, complex
export procedures, and limited trade agreements, have impeded the sector’s
competitiveness.
In this context, given the textile sector’s crucial role in India’s economy—contributing
to industrial output, employment, and export earnings—an analysis of the sector will
be undertaken. This publication examines 14 products classified under HS-50 to HS-63
at aggregate and disaggregate levels, providing insights into their composition, trade
direction, and global market presence.
India’s export patterns in textiles reveal a strong presence in natural fibre-based
categories (HS 52 & HS 57), particularly cotton (12.3% share, RCA 6.8, 3
rd
rank) and
carpets (10.5% share, RCA 5.9, 3
rd
rank). These segments show both a high Revealed
Comparative Advantage (RCA)
13
and a notable share in world exports, indicating India’s
competitive strength in traditional textile sectors.
India holds a higher global export share in raw materials such as cotton and select
textile categories. However, the apparel segment (HS 61 & 62) remains less competitive,
with a relatively low RCA of only 1.3–1.7. Additionally, Bangladesh and Vietnam have
surpassed India in these segments, capturing more than twice its share in global
exports.
The man-made textile segments (HS 54 & 55) show mid-level RCA (1.8–2.6) but
relatively low export shares (3.3–4.7%), reflecting a developing but not yet strong
position. In technical textiles (HS 56, 59, 60), both RCA and share are low, indicating an
underdeveloped segment despite the rising global demand which are dominated by
China, Germany, and Korea.
China continues to dominate as the largest competitor across almost all textile
categories, with particularly high global shares in man-made textiles (50%), technical
textiles, and even traditional segments such as carpets and cotton. India’s dependence
on China for raw materials in synthetic fibers and technical textiles could be a strategic
challenge for scaling exports which have been analysed in the global value chain
section of this publication.
13
A country is said to have a revealed comparative advantage (RCA) in a given product i when its ratio of ex-
ports of product i to its total exports of all products exceeds the same ratio for the world as a whole. If RCA
takes a value greater than unity, the country has a revealed comparative advantage in that product Trade Watch July-September (Q2) FY25 13
Table 2: India’s Exports Presence in Global Demand for 2023
HS 2Products
World
Demand
(USD bn)
Product
Share in
World
Textile
Export
India's
textile
exports
to World
(USD
bn)
Indias
export
share in
World
textile
exports
India's
RCA
Major Global
Player
50
Silk1.832 0.2% 0.117 6.4% 3.6China (Share -
44%, RCA - 3.05)
51
Wool & other
animal hair
based textiles
11.312 1.3% 0.173 1.5% 0.8Italy (Share -
19%, RCA - 6.7)
52
Cotton 52.853 6.0% 6.493 12.3% 6.8China (Share -
20%, RCA - 1.4)
53
Other
Vegetable fibre
textile
6.427 0.7% 0.434 6.8% 3.7China (Share -
28%, RCA - 1.7)
54
Manmade
filament based
textiles
54.742 6.2% 1.795 3.3% 1.8China (Share -
52.5%, RCA - 3.6)
55
Man-made
staple fibres
35.672 4.0% 1.678 4.7% 2.6China (Share -
37%, RCA - 2.5)
56
Wadding,
nonwoven, yarn
etc
30.401 3.4% 0.549 1.8% 1.0China (Share -
25%, RCA - 1.7)
57
Carpets and
other floor
coverings
17.220 2.0% 1.81110.5% 5.9China (Share -
23%, RCA - 1.6)
58
Special woven
/tufted fabric,
tapestry etc
12.215 1.4% 0.367 3.0% 1.6China (Share -
47%, RCA - 3.3)
59
Impregnated,
coated, textile
fabrics
27.661 3.1% 0.464 1.7% 0.9China (Share -
34%, RCA - 2.3)
60
Knitted or
crocheted
fabrics
37.770 4.3% 0.459 1.2% 0.7China (Share -
57%, RCA - 3.9)
61
Articles of
apparel and
clothing
accessories
268.90430.5% 6.664 2.5% 1.3China (Share -
31%, RCA - 2.15)
62
Articles of
apparel and
clothing
accessories, not
knitted
247.41528.1% 7.840 3.2% 1.7China (Share -
29%, RCA - 1.9)
63
Other made-up
textile articles
etc
77.152 8.8% 5.390 7.0% 3.8China (Share -
43%, RCA - 3.0)
Total 881.634.2 3.9%
Source: ITC Trade Map Trade Watch July-September (Q2) FY25 14
The global export distribution highlights China’s overwhelming dominance across
segments, with shares as high as 57% in knitted fabrics and 52.5% in synthetic filaments.
Even in categories where India ranks as one of the top five exporters, the absolute
export value remains modest signifying potential to expand exports.
Chapters 61 and 62 account for approximately 60% of global textile export demand,
but India holds only a 6% share despite having an RCA share of greater than 1. This
reflects India’s continued focus on traditional textiles and natural fibers while facing
challenges in expanding its presence in the high-growth synthetic and technical
textile segments.
Table 3: Trends in India’s Textile Export Presence in Global Demand
Average Share %
(2019-2023)
2023 (US$ billion)Share % in 2023
India’s
Export
Share
% in
World’s
Import
(2023)
Category
India’s
export
share in
World’s
import
Number
of 6HS
items
India’s
Textile
Exports
World's
Textile
Imports
India’s
Textile
Export
Basket
World’s
Textile
Import
Basket
Category
1
Less
than 1%
334 1.19 325.11 3% 37% 0.4%
Category
2
Between
1% - 5%
248 8.08 347.94 24% 40% 2.3%
Category
3
Between
5% - 10%
124 6.95 104.68 20% 12% 6.6%
Category
4
More
than 10%
134 17.80 94.75 52% 11% 18.8%
Total
of the
above
840 34.03 872.48
Source: ITC Trade Map
India’s textile exports are highly concentrated in a few product categories: While the
country exports 840 textile products, more than 52% of its exports come from just
134 items, in which India holds a global export share of over 10%. This indicates strong
competitiveness in selected segments but also absence of diversification.
Low penetration in most textile categories: Category 1 which represents 334 items
have a global market share of 37% but India has captured only 0.4%, highlighting weak
competitiveness in a significant portion of the sector.
Missed opportunities in mid-range categories: In Category 2 and 3, India holds 9%
share in global imports across 372 products, these account for 44% of India’s textile
exports suggesting India has a strong but underutilized position in mid-range textile
categories. These include rayon, cabled cotton yarn, synthetic to name a few.
Stronghold in limited segments: India has a global market share of 19% in Category 4,
showing strength in niche product lines. However, these products represent only 11%
of global textile imports, limiting growth potential if India does not expand into other
segments. Trade Watch July-September (Q2) FY25 15
The dis-aggregate level analysis (HS-6 digits) indicates India’s strong competitiveness
in select high-demand textile products but a limited presence in a wide range of textile
products which constitute substantial global demand. There is potential to expand
market share in Category 2 and 3, while maintaining a strong position in Category
4, particularly in products such as uncombed cotton yarn, coconut coir, carpets, and
home textiles.
1. Analyzing peer presence in exports of textile and clothing
India’s textiles and textile products exports show a mix of strengths and areas for
improvement in the global market. While the country competes well in some
segments, it faces challenges from other major exporters. Factors like production
costs, supply chain efficiency, and evolving market trends influence its performance.
Figure 16: Competitor Export Presence- Share in World’s Export 2023

Source: ITC Trade Map
India depicts strong competitiveness in natural fibre-based segments, ranking
among the top three global exporters in cotton (HS 52, 12.3% share, 3rd rank), carpets
and other textile floor coverings (HS 57, 10.5% share, 3rd rank), and other made-up
textile articles (HS 63, 7.0% share, 2nd rank). These categories benefit from India’s raw
material availability, and established production networks. However, China’s export
share remains dominant across all segments, commanding a 20% share in cotton,
43% market share in made-up textile articles and 23% in carpets.
Apparel Sector (HS 61 & 62) lags behind Bangladesh and Vietnam
India ranks 8th (HS 61) and 9th (HS 62) in clothing exports, with shares of 2.5–3.2%, Trade Watch July-September (Q2) FY25 16
while Bangladesh (9.17%-10%) and Vietnam (5.49%–6.19%) have surpassed India. This
highlights India’s lag in apparel competitiveness, likely due to higher production costs,
lower efficiency, and weaker integration into global supply chains compared to its Asian
competitors. Despite being a global leader in production, India’s MMF consumption is
just 3.1 kg per capita, far lower than China (12 kg) and North America (22.5 kg), reflecting
limited adaptation in apparel manufacturing due to lack of competitive MMF prices.
India’s synthetic-to-natural fiber ratio is around 1:1, whereas globally, it is 3:1, indicating
a need for India to expand its MMF segment to align with global market trends
14
.
Man-Made Textiles (HS 54 & 55): A mid-tier player
India holds moderate rankings in synthetic textile categories, such as manmade
filament-based textiles (HS 54, 6th rank, 3.3% share) and man-made staple fibers (HS
55, 4th rank, 4.7% share). However, these remain far behind China (37–53% share),
which dominates global synthetic textile supply chains. South Korea, Indonesia, and
Turkey also hold competitive positions, suggesting India faces stiff competition from
established synthetic textile hubs.
Untapped potential in high-value and technical textiles (HS 56, 59, 60)
India ranks outside the top 10 in technical textiles and high-performance fabrics,
including wadding & nonwoven fabrics (HS 56, 14th rank, 1.8% share), impregnated and
coated fabrics (HS 59, 14th rank, 1.7% share), and knitted or crocheted fabrics (HS 60,
11th rank, 1.2% share). These segments are dominated by China, Germany, and South
Korea. Given the rising global demand for technical textiles in automotive, medical,
and industrial applications, this segment has potential that needs to be captured.
Bangladesh’s Textile Crisis: A Strategic Opportunity for India
In 2023, Bangladesh exported $48.9 billion in textiles, making it the second-largest
textile exporter globally, with textiles contributing to 15% of GDP. The ready-made
garments (RMG) sector, consisting of 3,500 factories, contributes 85% of Bangladesh’s
annual exports
15
. HS 61(Articles of apparel and clothing accessories, knitted or
crocheted) and HS 62 (Articles of apparel and clothing accessories, not knitted or
crocheted) comprise of ~ 86% of the top exports from the country. However, recent
political unrest, curfews, internet blackouts, and flooding have severely disrupted
Bangladesh’s RMG sector. The $400 million loss in RMG exports , compounded by
Chattogram port shutdowns, has caused severe shipment delays. Industry experts
predict a 15–20% export decline for Q1 2025, while the EU has postponed a trade
partnership agreement
16
. Prolonged instability may push global buyers to seek
alternative suppliers.
14
https://www.texmin.nic.in/sites/default/files/Indian%20Manmade%20fibre%20textile%20industry_0.pdf
15
https://www.thehindu.com/news/international/post-revolution-bangladesh-protests-cost-garment-indus-
try-400m/article68777994.ece
16
https://www.livemint.com/market/stock-market-news/bangladesh-protests-textile-stocks-gokaldas-ex-
ports-arvind-and-6-others-jump-up-to-19-heres-why-11722930457825.html Trade Watch July-September (Q2) FY25 17
India is well-positioned to capitalize on this situation by expanding its presence in
key textile segments, particularly in manmade fibre (MMF) textiles, technical textiles,
and value-added apparel. In 2023, India’s exports of knitted or crocheted rubberized
textile fabrics accounting for 3.3% of total textile exports in this category
17
. With a
stable policy environment, India’s textile sector benefits from the Rebate of State and
Central Levies and Taxes (RoSCTL) scheme (extended until March 2026)
18
, incentives
for low-cost manufacturing, and the Production-Linked Incentive (PLI) scheme
aimed at boosting MMF and technical textiles. Additionally, free trade agreements
(FTAs) with the UK and EU present opportunities for India to expand its exports in
categories where Bangladesh is experiencing setbacks. By strengthening supply
chains, enhancing MMF production, and ensuring seamless port operations, India
can position itself as a reliable alternative for global buyers looking to diversify their
textile sourcing.
2. Mapping of India’s Textile Exports with Global Demand and Supply
This section examines India’s textile exports across top product categories and their
position relative to major global competitors. While India has a strong presence in
cotton and handmade carpets, it faces growing competition from countries like China,
USA, and Turkey.
The USA, UAE, and UK remain key markets, but there is potential to expand into
regions such as Japan, South Korea, and Latin America. Strengthening cotton value
chains, exploring high-value apparel segments, and promoting sustainability can help
improve competitiveness. Additionally, trade agreements with markets like the EU
and UK could support further export growth.
Cotton (HS Code 52): India exports raw cotton mainly to Bangladesh, China, and
Vietnam, limiting its value addition. Competing with China and the USA. India should
target emerging markets like Indonesia and Turkey while focusing on investments
in processing and branding. Strengthening the cotton value chain can also enhance
competitiveness in premium segments.
Carpets and Other Textile Floor Coverings (HS Code 57): India dominates handmade
carpet exports but faces competition from machine-made products from China and
Turkey. Expanding into Saudi Arabia and Japan through sustainability certifications
and FTAs will boost exports. Promoting high-value hand-knotted carpets can help
India retain its edge.
Articles of Apparel and Clothing Accessories (HS Code 61): India’s apparel exports rely
on the USA, UAE, and UK, but competitors like China, Bangladesh and Vietnam are
gaining ground. Expanding into Japan, South Korea, and Latin America can reduce
market concentration. Strengthening trade agreements and sustainability compliance
can enhance India’s market position.17
https://wits.worldbank.org/trade/comtrade/en/country/IND/year/2023/tradeflow/Exports/partner/ALL/prod-
uct/590691
18
https://pib.gov.in/PressReleasePage.aspx?PRID=2001049 Trade Watch July-September (Q2) FY25 18
Table 4: Mapping of India’s Textile Supply with Leading Exports and their Prime Destinations (2023)Supply Side Demand Side
India's Top
Export
Destinations
Country's
Share in
India's
Exports of
Respective
Product
Category
Share of
Product
Category in
India's Total
Exports to
Respective
Country
Leading Global
Exporter in
Respective Product
World Market
Top Destinations of Leading
Global Exporter in Respective
Product

52-Cotton

Bangladesh 33.6 19.36 China (20.2)
Bangladesh (18.7), Vietnam (15.4),
Cambodia (5.4)

China 12.8 51.32 USA (13.8)
China (21.5), Pakistan (11.1), Vietnam
(10.3)

Vietnam 4.1 47.18 India (12.3)
Bangladesh (33.6), China (12.08),
Vietnam (4.1)

57-Carpets and other textile floor coverings

USA 57.9 13.8 China (23.4) USA (20.2), Japan (8), Saudi Arabia (5.4)

Germany 5.3 0.99 Turkey (16.3) USA (29.2), Saudi Arabia (9.6), Iraq (6.9)

UK 5.2 0.7 India (10.5) USA (57.9), Germany (5.3), UK (5.2)

61-Articles of apparel and clothing accessories

USA 32.1 2.82 China (30.9)
USA (23.1), Japan (8.2), South Korea
(3.8)

UAE 9.6 1.93 Bangladesh (10) Germany (19.7), UK (12.5), USA (11.1)

UK 8.9 4.42 Vietnam (5.5)
USA (53.1), Japan (12.9), South Korea
(6.7)

62-Articles of apparel and clothing accessories, not knitted or crocheted

USA 32.1 3.31 China (28.6) USA (18.5), Japan (7.6), Kyrgyzstan (5.4)

UK 9.4 5.52 Bangladesh (9.2) USA (30.7), Germany (13.3), UK (11.8)

UAE 6.6 1.56 Italy (6.6) France (12.1), Germany (9.7) , USA (9.6)

63-Other made-up textile articles; sets etc

USA 48.9 3.47 China (43.4) USA (30.6), Japan (8.2), UK (3.7)

UK 4.7 1.9 India (7) USA (48.9), UK (4.7), Germany (3.8)

Germany 3.8 2.14 Pakistan (6.5) USA (29.2), UK (12.4), Germany (7.5)

Source: ITC Trade Map
Articles of Apparel and Clothing Accessories, Not Knitted or Crocheted (HS Code 62):
India faces stiff competition from China and Bangladesh, which benefit from trade
agreements in key markets. To remain competitive, India must push for FTAs with
the EU and UK while expanding into high-value apparel segments and focusing on
sustainable fashion and technical garments.
Other Made-Up Textile Articles (HS Code 63): India’s exports in this segment rely on
the USA and UK, but competition from China and Pakistan is growing. Targeting Latin
America and Africa can reduce dependency on traditional markets. Expanding into
technical textiles and negotiating better trade terms with the EU can drive growth. Trade Watch July-September (Q2) FY25 19
Textile Industry Indicators: Peer-country Comparison

0.12
0.08
0.07
0.1
0
0.04
0.08
0.12
India China VietnamBangladesh
in $
Commercial Electricity Cost (kW/h)
(2025)
Energy & Utilities Labour
10.7
19.8
12.4
8.7
0
5
10
15
20
India China VietnamBangladesh
$ at PPP
Real Output per worker (2025)
Taxation
Logistics
Textile Industry Indicators: Peer-country Comparison
Source: Global Petrol Prices
India's textile industry faces higher commercial electricity costs ($0.12 per kWh) and corporate tax rates
(30%) compared to China, Vietnam, and Bangladesh, which are impacting operational expenses.
Additionally, India's GDP per hour worked ($10.7) lags behind China ($19.8) and Vietnam ($12.4), indicating
lower labor productivity. However, India's Logistics Performance Index score (3.4) is competitive,
surpassing Bangladesh (2.6) and closely trailing China’s score (3.7). Rank-wise there is substantial variation,
India still needs to improve its customs and infrastructure particularly in comparison with China.
Energy costs in India are 10%-60% higher than in its peers, exacerbated by cross-subsidization, hampering
competitiveness. India needs to prioritize reduction in costs for all factor inputs – labor and electricity
primarily. India's labor market requires attention despite its wages being low it does not result in cost
competitiveness due to enforcement and compliance cost. Wages also follow the labor productivity trend
with China leading with wages at $2642, followed by Vietnam at $1591, India at $674 and Bangladesh at
$212 annually. Even cheap labor in India comes at the cost of low productivity.
Bangladesh, Vietnam, and China became textile leaders primarily through privatization and trade
integration. Bangladesh shifted to private-led growth with tax incentives, EPZs, and FDI (e.g., Desh-
Daewoo). Vietnam attracted brands like NIKE via FTAs (CPTPP, EVFTA), low labor costs, and logistics hubs.
China leveraged SEZs, FDI, and industrial clusters in key regions. The “Six Priorities” policy and WTO entry
in 2001 boosted exports. Government support in infrastructure, training, and technology played a key role
across all three.

c
38
19
43
88
0
20
40
60
80
100
India China Vietnam Bangladesh
Logistics Performance Index Rank
(2023)
30%
25%
20%
27.50%
0%
10%
20%
30%
40%
India China Vietnam Bangladesh
Statutory Corporate Tax Rates
(2024)
Source: World Bank Source: Tax Foundation
Source: ILO
3. India’s presence in the Global Value Chain for Textiles
Global Value Chain (GVC) refers to trade in intermediate goods wherein operations are
spread across national borders, to produce the final product. GVC participation can be
expressed as the sum of pure backward participation
19
, pure forward participation
20
,
and two-sided participation
21
.
19
Pure backward participation refers to the share of a country’s exports that incorporates imported interme-
diate goods, indicating dependence on foreign inputs in production.
20
Pure forward participation represents the share of a country’s exports that are used as inputs in another
country’s exports, highlighting the role of domestic industries in global supply chains.
21
Two-sided participation captures instances where a country both imports intermediate inputs for its
exports and its exports are used as inputs in another country’s exports, reflecting deep integration into
multi-stage production networks. Trade Watch July-September (Q2) FY25 20
According to the WTO’s World Integrated Trade Solutions (WITS) database, 38.47% of
trade in textiles and textile products is GVC-related, valued at $259 billion, showing
a steady rise from 32.16% in 2015, valued at $13.5 billion. According to WTO estimates
for 2022,
22
Asia is the world’s dominant region recording ~71% of world exports for this
segment.
India’s GVC-related trade share in textile and related products fluctuated between
2015 and 2022, ranging from 23% (2015) to 30% (2022), with an overall upward trend.
The average annual increase in GVC trade share was approximately 1 percentage
point, but this growth was not linear. A notable dip to 20% in 2017 was followed by a
sharp 6-percentage-point rise in 2018. After relative stability from 2019 to 2020, GVC
participation surged from 23% (2020) to 30% (2022), a 7-percentage-point rise in just
two years, suggesting increased integration into global supply chains post-pandemic.
Meanwhile, traditional trade remained dominant but steadily declined from 80%
in 2017 to 70% in 2022, reinforcing India’s gradual shift toward GVC-linked exports.
(Figure 17)
Figure 17: Components of India’s Gross Trade for Textiles and Textile Products77% 77% 80%
74% 76% 77%
73% 70%
23% 23% 20%
26% 24% 23%
27% 30%
0%
20%
40%
60%
80%
100%
2015 2016 2017 2018 2019 2020 2021 2022
Traditional Trade % gross trade GVC-related trade % gross trade
Source: WITS
While India’s GVC-related trade in textiles and related trade increased from 23% in
2015 to 30% in 2022, with fluctuations, particularly a drop to 20% in 2017 and a sharp
rise to 26% in 2018. Pure forward GVC participation (GVCPF), representing India’s role
as an intermediate goods supplier, remained relatively stable, averaging 10.5%, with
a peak of 13% in 2022. Pure backward participation (GVCPB), indicating dependency
on foreign inputs, rose from 9% to 14%, suggesting increased reliance on imported
inputs. Two-sided GVC participation (GVCBF), reflecting both forward and backward
linkages, remained minimal but grew from 1% to 3%, showing slight progress in deeper
integration into global supply chains. The data signals a gradual shift toward greater
backward integration and higher overall GVC participation, particularly post-2020
(Figure 18). As per WTO, between 2017-2020, India’s clothing industry sourced various
raw materials, including cotton, wool, and synthetic fibers like polyester, nylon, and
viscose, from countries such as the United States, Australia, China, and South Korea
whereas its exports primarily consisted of cotton and yarn sent to Bangladesh and
China, overall driving its GVC participation.
22
https://www.wto.org/english/res_e/statis_e/miwi_e/gvc_sectoral_profiles_textiles_clothing24_e.pdf Trade Watch July-September (Q2) FY25 21
Figure 18: Components of India’s GVC trade for Textiles and Textile Products12% 12%
10%
11%
10% 9%
11%
13%
9% 9%
9%
13%
12%
12%
14%
14%
1% 1%
1%
2%
2%
1%
2%
3%
0%
5%
10%
15%
20%
25%
30%
2015 2016 2017 2018 2019 2020 2021 2022
Pure forward GVC participation (GVCPF) % trade Pure backward GVC participation (GVCPB) % trade
Two-sided GVC participation (GVCBF) % trade
Source: WITS
4. Evolving trends in India’s Textile Exports
India’s textile export trends have evolved in response to shifting global trade dynamics.
Globally, the share of cotton exports has declined over the years, dropping from 20.1%
in 2015 to 6% in 2023. This sharp decline reflects shifting trade dynamics, driven by
growing competition from synthetic fibers, evolving consumer preferences, and
rising production costs. Similarly, exports of carpets, silk, and vegetable fibre-based
textiles have decreased, indicating reduced demand or increased competition from
alternative materials.
India’s textile exports have shown growth in specialized segments but experienced
declines in traditional categories. Silk exports have increased, despite a global
contraction in silk demand. Technical textiles, including impregnated, coated, and
laminated textiles, also saw growth. However, traditional segments like cotton and
apparel faced declines. Cotton exports dropped, and apparel, accounting for the
majority of India’s textile exports, saw a reduction in market share, reflecting stiff
competition from countries like China and Vietnam.
Figure 19: Change in India’s share in the World trade -2%
-1%
0%
1%
2%
0%
4%
8%
12%
16%
Silk
Wool & other animal hair
based textiles
Cotton
Other Vegetable textile
fibre based textiles
Manmade filament based
textiles
Man-made staple fibres
Wadding, nonwoven,
yarn, twine etc
Carpets and other textile
floor coverings
Special woven/ tufted
fabric,tapestry etc
Impregnated, coated,
covered or laminated
textile fabrics
Knitted or crocheted
fabrics
Articles of apparel and
clothing accessories
Articles of apparel and
clothing accessories, not
knitted or crocheted
Other made-up textile
articles; sets etc
Indias share in world exports '15 Indias share in world exports '23 Change in India's share (2015 - 2023) (RHS)
Source: ITC Trade Map Trade Watch July-September (Q2) FY25 22
The man-made fibre sector also contracted, with both man-made filament-based
textiles and staple fibers experiencing significant drops. This trend highlights India’s
struggle to keep pace with the global shift toward synthetic and blended fabrics.
The textile industry faced challenges in the last two years due to geopolitical issues,
slumping demand, and high raw material costs. The import duty on cotton made
Indian cotton more expensive, while the quality control orders on MMF disrupted
raw material availability. The industry is urging the removal of the cotton import duty
during off-season months to regain competitiveness.
5. Recent Developments in India’s Trade Policies: Key Updates for the Textile Sector
India’s textile policy focuses on enhancing the sector’s growth through modernization,
sustainability, and export promotion. Key elements include the Production Linked
Incentive (PLI) Scheme for MMF Apparel (2021), which aim to boost domestic
manufacturing and global competitiveness in apparel, man-made fibers, and technical
textiles. The National Technical Textiles Mission (2020) supports the development
of high-tech textiles through innovation and R&D. To improve infrastructure and
foster industry clusters, the Pradhan Mantri Mitra (PM Mitra) Scheme (2021) plans
the creation of seven mega textile parks. The policy also emphasizes eco-friendly
practices, promoting sustainable production methods like organic cotton cultivation
and resource conservation. These initiatives collectively aim to modernize India’s
textile industry, expand exports, and enhance its global position. Some of the recent
developments in the textile policies are as follows:
◊ SAMARTH
23
: The Samarth Scheme, launched to enhance skills in the textile
sector, has been extended for FY 2024-25 to FY 2025-26 with an outlay of Rs. 495
Cr to train 3 lakh individuals. The scheme aims to provide demand-driven, NSQF-
compliant skilling programs and support industry efforts in creating jobs across
the textile value chain (excluding spinning and weaving). It is implemented
through 191 partners, including industry associations and government agencies.
As of December 2024, over 3.54 lakh beneficiaries have been trained, with 2.79
lakh placed in jobs.
◊ Rebate of State and Central Taxes and Levies (RoSCTL)
24
: On 7th March 2019, the
Government approved the Rebate of State and Central Taxes and Levies (RoSCTL)
Scheme to rebate all embedded taxes/levies on the export of Apparel/Garments
and Made-ups, aimed at enhancing the competitiveness of these sectors. The
Union Cabinet has further approved the continuation of RoSCTL on exports of
Apparel/Garments (Chapters 61 & 62) and Made-ups (Chapter 63) until 31st March
2026.
◊ Pradhan Mantri Mega Integrated Textile Region and Apparel (PM MITRA)
25
: The
Government has approved setting up of 7 (Seven) PM Mega Integrated Textile
Region and Apparel (PM MITRA) Parks in Greenfield/Brownfield sites with world-
class infrastructure including plug and play facility with an outlay of ₹4,445 crore
for a period of seven years up to 2027-28.
23
https://pib.gov.in/PressReleasePage.aspx?PRID=2089306
24
https://pib.gov.in/PressReleasePage.aspx?PRID=2089306
25
https://www.ibef.org/blogs/india-s-textile-industry-embracing-sustainability-and-innovation Trade Watch July-September (Q2) FY25 23
◊ BharatTex
26
: Bharat Tex is a global textile event to attract international investments
and buyers. The first-ever Global Textile Expo, Bharat Tex, was successfully held in
2024. It provided a platform for networking and business collaborations between
Indian and international businesses, as well as within different segments of the
Indian textile value chain. Following its success, the second edition, BHARAT
TEX 2025, was organized on a similar scale by a consortium of 11 Textile Export
Promotion Councils (TEPCs).
◊ National Technical Textiles Mission
27
: The Ministry of Textiles has approved 12
research projects worth INR 13.3 Cr. under the National Technical Textiles Mission.
These projects focus on strategic areas such as geotextiles, sustainable and smart
textiles, and composites. They were proposed by leading research institutions,
including IITs, NITs, and CRRI, to advance innovation in the technical textiles
sector.
◊ PLI Scheme for MMF Apparel : The scheme aims to boost domestic production of
MMF apparel, MMF fabrics, and technical textiles, with an outlay of ₹10,683 crore
over five years. Government has approved 64 applications out of 67 applications
received. In the approved 64 applications, the proposed total investment is
Rs.19,798 crore and projected turnover of Rs. 1,93,926 crores with a proposed
employment of 2,45,362.
28
Incentives will be provided on achieving threshold
investment and turnover, followed by incremental turnover.
◊ Textile Cluster Development Scheme (TCDS) : The scheme is launched for 2021-
26 with an outlay of Rs. 853 crores, aims to develop integrated ecosystem to
boost the viability of textile units. It subsumes earlier schemes like the Scheme
for Integrated Textile Parks (SITP) which supported infrastructure and Mega
Clusters for Power loom, Knitwear, and Silk sectors which focused on improving
market access. It also includes components from PowerTex India, focusing on
infrastructure, credit, modernization, and capacity building.
◊ Integrated Processing Development Scheme (IPDS) : The scheme was
launched to support the textile industry by improving infrastructure for common
effluent treatment plants (CETPs) and promoting water conservation. It aims
to develop environmentally sustainable processing units, particularly in textile
clusters, by providing financial assistance for modernizing processing facilities,
reducing pollution, and ensuring compliance with environmental norms. Initially
implemented until March 31, 2021, the scheme has now been extended with an
outlay of ₹275 crore solely for completing ongoing projects.
26
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2010506
27
https://pib.gov.in/PressReleasePage.aspx?PRID=2072728
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https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1913958#:~:text=Financial%20Year%20
2022%2D23%20and,proposed%20total%20investment%20is%20Rs. Trade Watch July-September (Q2) FY25 24
6. Key Insights on India’s Textile Trade
In 2023, India was the sixth-largest exporter of textiles and apparel, accounting for 4%
of global exports in the sector.
29
Despite being one of the country’s oldest industries,
its share remains modest. Textiles and apparel contributed approximately 5% to India’s
total exports, amounting to $34.2 billion. The key findings of the analysis are as follows:
◊ India has a strong export presence in natural fibre-based textiles, particularly in
cotton (HS 52) and carpets (HS 57). Cotton holds a 12.3% share in global exports,
while carpets account for 10.5%. India’s textile and apparel exports have remained
at approximately $40 billion for the past six years, growing at just 0.8% annually,
far below the global growth rate of 3.5%.
◊ India’s textile exports are concentrated in a limited number of product categories.
While the country exports 840 textile products, more than 52% of its exports
come from just 134 items, in which India holds a global export share of over 10%.
This indicates strong competitiveness in selected segments but also absence of
diversification.
◊ China dominates global textile exports, leading in man-made textiles (50%),
technical textiles, and traditional segments such as cotton and carpets. India’s
dependence on China for synthetic fiber and technical textile raw materials
presents a challenge for expanding exports.
◊ India’s textile export strategy relies on key markets for Cotton (HS 52), Apparel
(HS 61 & HS 62), and Made-Up Articles (HS 63), making diversification into Japan,
South Korea, Latin America, and Africa essential to mitigate competition from
China, Bangladesh, and Vietnam and reduce market concentration risks.
◊ Apparel and clothing (HS 60 & HS 61) account for ~60% of global textile exports.
India holds only a ~6% share, lagging behind Bangladesh and Vietnam.
Bangladesh has gained a competitive edge in global trade through low labor
costs, large-scale production, strong buyer ties ensuring global standards, and
export-focused incentives.
◊ India’s Global Value Chain (GVC) participation in textiles has increased from
23% in 2015 to 30% in 2022, driven by higher backward integration indicating
rising reliance on imported inputs, while forward integration remains stable,
highlighting India’s role as an intermediate goods supplier.
◊ India’s textile export composition (HS 52, HS 57, HS 61, HS 62, HS 54, HS 55) is
shifting, with declining cotton and apparel exports, while technical textiles and
silk segments show growth, highlighting the need for policy support to enhance
competitiveness in synthetic and blended fabrics.
29
https://pib.gov.in/PressReleasePage.aspx?PRID=2089508#:~:text=Ministry%20of%20Textiles-,India’s%20
share%20of%20global%20trade%20in%20textiles%20and%20apparel%20stands,October%20of%20FY%20
2024%2D25. Trade Watch July-September (Q2) FY25 25
C. GEOPOLITICAL FACTORS
IMPACTING GLOBAL TRADE Trade Watch July-September (Q2) FY25 26
C. Geopolitical Factors Impacting Global Trade
1. Geopolitical Developments
The global trade landscape is increasingly being shaped by geopolitical shifts.
Tariffs now being the main factor dictating trade patterns. While they may offer
short-term relief, they raise costs, distort resource allocation, and weaken long-term
competitiveness across countries. Historical cases
30
show that tariff wars have led to
higher consumer prices and economic stagnation rather than protecting domestic
industries. A detailed analysis of the Reciprocal Tariff Plan’s impact on India will be
presented in the next issue. Ongoing trade policy shifts continue to reshape India’s
economic strategy, bringing both challenges and opportunities.
(i) The Rise of Friendshoring and Western Bloc Trade Realignments
In response to rising geopolitical tensions and trade wars, Western countries are
increasingly shifting their supply chains to politically aligned nations—a strategy now
referred to as ‘friendshoring’.
31
. The WTO has observed a growing fragmentation in
global trade, especially between the U.S. and China, as countries seek to prioritize
trade within their own geopolitical blocs. While this shift disrupts traditional trade
patterns, it creates new opportunities for emerging economies like India, particularly
in sectors such as pharmaceuticals, IT services, and manufacturing. However,
increasing competition from Vietnam, Mexico, and Poland, along with stringent labor
and environmental regulations, necessitates that India enhances its ease of doing
business, trade infrastructure, and regulatory alignment to capitalize on these shifts
effectively.
32
(ii) The Expansion of BRICS and Its Impact on Global Trade
The BRICS alliance (Brazil, Russia, India, China, and South Africa) expanded in 2024 to
include key energy-rich nations like Saudi Arabia, the UAE, Egypt, Iran, and Argentina.
This expansion presents both opportunities and challenges for India. While deeper
trade ties within BRICS can enhance economic cooperation, India’s trade balance with
China remains a concern. Ensuring balanced benefits for all members will require
carefully structured internal trade policies, particularly in sectors where China holds a
dominant position.
(iii) The Growing Influence of Africa in Global Trade
Africa’s rapid economic growth, bolstered by increasing trade liberalization efforts such
as the African Continental Free Trade Area (AfCFTA), has made the continent a key
focus for global trade partnerships. The African Continental Free Trade Area (AfCFTA),
which aims to eliminate tariffs and trade barriers, is gaining momentum, creating one
of the world’s largest free trade areas with a combined GDP of over $3.4 trillion. Africa’s
total consumer and business spending is projected to surpass $6.7 trillion by 2030,
30
Smoot-Hawley Tariff Act (1930), Trump 1.0 Tariffs, U.S.-Europe “Chicken Wars are a few examples highlight-
ing the negative impact of tariffs.
31
https://www.weforum.org/stories/2023/02/friendshoring-global-trade-buzzwords/
32
https://www.gtreview.com/news/global/friendshoring-on-the-rise-led-by-us-china-trade-war-wto/ Trade Watch July-September (Q2) FY25 27
presenting an opportunity for both local and international businesses.
33
Global players,
including China and the EU, are increasing investments in African markets, particularly
in infrastructure and digital trade. India, which has long-standing trade and cultural
ties with Africa, has been expanding its exports of pharmaceuticals, automobiles, and
IT services to the continent. However, increased Chinese dominance in African markets
poses competition for Indian businesses, requiring stronger diplomatic and trade
engagements, including concessional financing and technology-driven partnerships.
2. Commodity Price Trends
34
According to the latest IMF Commodity Price Index, the aggregate commodity price
index fell by 4% y-o-y, largely driven by a 23% drop in crude oil prices and a 13% decline
in coal prices. Oil prices fluctuated between February and August, trading between
$75 and $90 per barrel, before softening in September due to weaker global demand.
While OPEC+ production cuts provided some support to prices, strong supply growth
from non-OPEC+ countries, particularly the United States, Canada, and Guyana, kept
prices in check. Meanwhile, coal prices declined as economies continued their shift
toward renewable energy, reducing demand from major importing countries.

Figure 20: Price indices across key commodities100
120
140
160
180
200
220
240
260
All commodity indexAPSP crude oil($/bbl) Food index
Coal indexMetal indexPrecious Metals Price Index
Source: IMF
Metals and agricultural commodities displayed varied price movements during this
period. The IMF’s metals price index rose 7.7% from February to August 2024, driven by
higher copper (+8.1%) and aluminum (+7.8%) prices, due to increased demand primarily
from renewable energy, electric vehicle, and data center industries. However, prices
began to retreat in July due to weaker demand projections from China, especially in
construction-related sectors, leading to a 19.9% drop in iron ore prices. Precious metals
like gold surged 21.9%, reaching record highs, fueled by geopolitical uncertainty and
expectations of rate cuts. In agriculture, cereal prices declined 14.3%, as global grain
production hit a record high for FY 2024–25. However, Coffee and cocoa prices surged
33.8% and 20.4%, respectively, due to supply constraints in key producing regions like
33
https://www.brookings.edu/articles/the-promise-of-free-trade-and-integration-across-africas-nations/
34
WORLD ECONOMIC OUTLOOK: POLICY PIVOT, RISING THREATS- Commodity Special Feature: Market
Developments and the Inflationary Effects of Metal Supply Shocks Trade Watch July-September (Q2) FY25 28
Brazil, Vietnam, and West Africa. India’s coffee and cocoa exports could face both
opportunities and challenges as the global market adjusts to these price hikes.
Geopolitical factors continued to influence commodity markets, though their impact
was more moderate compared to previous quarters. Rising tensions in the Middle East
and disruptions in Red Sea shipping routes added volatility to oil markets, though no
major supply shortages occurred. Looking ahead, commodity prices remain subject
to economic policy shifts, geopolitical risks, and changing demand patterns, requiring
careful monitoring to assess potential trade implications for India and other emerging
economies. Trade Watch July-September (Q2) FY25 29
CONTRIBUTORS
Dr. Pravakar SahooSenior Adviser, NITI Aayog
Shri Amit VermaDirector, NITI Aayog
Smt. Jyotika NagvanshiDeputy Director, NITI Aayog
Smt. Mala ParasharConsultant-I, NITI Aayog
Smt. Pooja TeotiaConsultant-I, NITI Aayog
Dr. Apica SharmaConsultant-I, NITI Aayog
Smt. Salome Sara PhilipsYoung Professional, NITI Aayog
Smt. Riya JindalYoung Professional, NITI Aayog
Smt. Kavya Raghuram RaoYoung Professional, NITI Aayog
Shri Manuj JoshiYoung Professional, NITI Aayog
TRADE WATCH QUARTERLY, Publication for the (Q2) FY25
Copyright@ NITI Aayog, 2025
Published: March 2025
NITI Aayog
Government of India
Sansad Marg, New Delhi-110001, India Trade Watch July-September (Q2) FY25 31

Trade Watch- Quarterly (July - September [Q2] FY25)