India’s industrial output recorded strong growth in August 2026, but the textile and apparel sectors moved in different directions. While textile production and apparel production in India showed a clear divergence, upstream textile manufacturing expanded strongly and apparel production remained under pressure.

According to the latest Index of Industrial Production (IIP) data, India’s overall industrial output grew 8% in August 2026, compared with 6.7% in July.

Textile production gains momentum

The textile industry recorded 13.1% growth in August. It also posted an 11.9% cumulative increase during April-August 2026.

The growth reflects stronger activity across upstream segments such as yarn and fabric. These segments are influenced by raw-material prices, inventories and intermediate demand.

Yarn prices have also increased recently, supporting higher production values in some parts of the textile supply chain.

Apparel production remains under pressure

The trend was different for wearing apparel. Apparel production declined 7.4% in August 2026 compared with the same month last year.

During April-August, apparel production fell 5.6% year on year.

The divergence highlights the pressure on the downstream apparel sector. Unlike yarn and fabric manufacturers, apparel companies depend more directly on export orders, buyer inventories and global retail demand.

Global uncertainty affects apparel demand

A Sakthivel, Chairman of the Apparel Export Promotion Council, said textile and apparel production cover different stages of the manufacturing chain. Therefore, their output does not always move together.

He noted that geopolitical tensions and trade uncertainties can affect apparel production more quickly because the segment is closely linked to international demand.

India’s textile and apparel industry, however, has a large domestic market. The Ministry of Textiles’ National Household Survey 2024 estimated the overall textile market at Rs 14.95 lakh crore. The domestic market accounted for Rs 12.02 lakh crore, or about 80% of the total.

India targets higher apparel exports

India aims to increase apparel exports to $40 billion by 2030 from around $16 billion currently.

The latest production data show that achieving this target will depend not only on stronger textile manufacturing but also on a recovery in apparel demand, export orders and global retail activity.

The widening gap between upstream textile output and downstream apparel production remains an important indicator for the industry as manufacturers navigate changing global trade and demand conditions.