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India’s textile and apparel sector, finds itself entangled in a rapidly shifting global trade environment. As geopolitical uncertainties and reciprocal tariffs threaten traditional markets, India must stich a new strategy—one rooted in diversification, strategic alliances, and innovation.
The tariff tango and market diversification
With the threat of reciprocal tariffs looming large, India's reliance on a few export markets poses a significant vulnerability. To reduce this, a broader understanding of the global textile and apparel trade market is essential. Market size, product preferences, and trade agreements all factor into the equation as India evaluates its next moves.
Table: Textile and apparel importers (2023)
|
Country |
Import Value ($ bn) |
Major Import Categories |
|
US |
130 |
Apparel, Home Textiles |
|
EU (Total) |
180 |
Apparel, Fabrics |
|
UK |
35 |
Apparel, Home Textiles |
|
UAE |
18 |
Re-exports, Apparel |
|
Australia |
12 |
Apparel, Home Textiles |
|
Japan |
25 |
Apparel, Technical Textiles |
|
Canada |
15 |
Apparel, Home Textiles |
This data highlights the opportunity intertwined with caution. These countries represent both India's most lucrative targets and its most delicate dependencies.
The US, high-value market, high-risk scenario
The US, with textile and apparel imports valued at $130 billion, continues to be one of India’s largest and most rewarding markets. Indian exporters thrive here, especially in categories like apparel and home textiles. However, the very volume of trade that makes the US attractive also heightens the risk of exposure to tariff retaliations.
Reciprocal tariffs could erode margins and competitiveness, making it crucial for Indian exporters to not only enhance product value through quality and innovation but also reduce dependency on this high-risk yet high-reward market.
The European Union, an anchor
The European Union, with $180 billion in textile and apparel imports, is the largest market in this analysis. Its appetite spans from high-street fashion to premium fabrics, offering a vast canvas for Indian products. The ongoing India-EU Free Trade Agreement (FTA) negotiations are central, as a successful conclusion could provide preferential access and ease tariff burdens. The EU also places a premium on sustainability and compliance—two areas where Indian manufacturers must continue to evolve. A stronger EU partnership could anchor India’s textile exports for the long term.
Australia and Canada, stable growth markets
Australia and Canada may not match the scale of the US or EU, but their consistent demand and stable economic environments make them valuable allies. With import values of $12 billion and $15 billion respectively, they offer room for growth, especially in categories like home textiles and casual wear.
The India-Australia Economic Cooperation and Trade Agreement (ECTA) already offers a tariff edge, making it easier for Indian exporters to enter and expand. Strengthening presence in these markets can provide much-needed balance in India’s export portfolio.
Japan, the technical textile niche
Japan’s $25 billion textile import market is highly specialized, with an increasing focus on technical textiles—a segment where India is investing heavily. This aligns perfectly with India's ambitions to move up the value chain and capture high-margin sectors.
However, there are challenges. Tariffs on imported machinery or raw materials for technical textiles could inflate costs, underscoring the need for domestic capacity building in this segment. Yet, with the right focus, Japan could become a key partner in India’s value-added textile journey.
The UAE, a re-export gateway
Though not a traditional end-user market, the UAE’s $18 billion re-export business in textiles makes it a critical node in the global trade web. For Indian exporters, the UAE offers a logistical and commercial hub to access Africa, Europe, and Central Asia. Leveraging this re-export potential requires agility, competitive pricing, and supply chain efficiency—but the rewards could be significant in tapping into secondary markets via the Gulf.
Diversification, resilience the new realty
The data underscores a clear message: India must spread its bets. The textile and apparel sector must pivot from dependency on singular markets to a diversified export strategy. Here’s what the path forward entails.
- Strengthening the EU connection through a successful FTA to secure tariff relief and long-term stability.
- Leveraging the India-Australia ECTA to deepen trade relations and capitalize on the Pacific's growing demand.
- Expanding footprints in Canada and other mid-tier markets for consistent, stable growth.
- Tapping into Japan’s technical textile segment, with a focus on quality and innovation.
Utilizing the UAE as a re-export base, broadening global access through a strategic hub.
A chilling wave of pessimism has swept across the US, with consumer sentiment falling to levels unseen since the depths of the Great Recession, according to the University of Michigan's latest survey. The preliminary reading of 50.8, the second-lowest since 1952, paints a stark picture of American anxieties due to volatile trade policies and escalating inflation concerns. This sharp decline, as reported earlier this month, raises serious questions about the future of consumer spending, a cornerstone of the US economy, and its ripple effects on sectors like fashion and apparel.
The sentiment-spending disconnect
While "hard data" like employment figures remain relatively robust, the "soft data," reflecting consumer confidence, is flashing red. The Michigan survey reveals a significant increase in the proportion of Americans expecting rising unemployment, a clear indicator of growing economic unease. This disconnect between strong employment and sinking confidence creates a precarious situation.
The fashion industry's fragile position
The fashion and apparel industry, heavily reliant on discretionary spending, is particularly vulnerable to shifts in consumer sentiment. While the affluent have historically driven fashion sales, their confidence is now wavering due to recent market turbulence, triggered by trade-related uncertainties.
As per Bill Adams, chief economist at Comerica Bank wealthy consumers' stock market gains kept the economy growing in 2024 despite high prices, but the wealthy won't feel confident enough to keep spending if this keeps up.
Inflation fears and spending habits
The Federal Reserve's growing concern over rising inflation expectations further complicates the outlook. The survey indicates a significant jump in anticipated inflation rates, which could lead consumers to alter their spending habits. If Americans lose faith in the Fed's ability to control inflation, they may prioritize essential purchases over discretionary items like clothing and accessories.
Data snapshots
· Consumer sentiment (University of Michigan): Preliminary reading of 50.8 in April, the second-lowest since 1952.
· Inflation expectations (1-Year): Rose to 6.7 per cent in April, the highest since 1981.
· Inflation expectations (5-10 Years): Climbed to 4.4 per cent.
Impact on fashion spending
A decline in consumer confidence directly impacts discretionary spending, including fashion and apparel. Rising inflation expectations may lead to reduced spending on non-essential items. Market volatility, driven by trade uncertainties, threatens the spending power of affluent consumers, a key demographic for luxury fashion. In fact, reports indicate a potential slowdown in luxury spending as affluent consumers react to market volatility and economic uncertainty. High-end fashion brands, which have enjoyed strong growth, may face challenges in maintaining sales momentum.
Amidst economic uncertainty, consumers may prioritize value and durability over trendy, fast-fashion items. This could lead to an increase in demand for classic, timeless pieces and sustainable fashion. Moreover, online retailers and discount stores may see increased traffic as consumers seek deals and affordable options.
While the 90-day tariff pause offers a glimmer of hope, the underlying economic anxieties remain. The fashion industry must adapt to this evolving landscape by focusing on value, durability, and sustainable practices. Brands that can resonate with consumers' changing priorities and offer affordable options will be better positioned to weather the storm.
"The economy is facing considerable turbulence," noted JPMorgan Chase CEO Jamie Dimon, highlighting the precarious situation.
The coming months will be crucial in determining whether the current sentiment translates into a significant slowdown in consumer spending and how the fashion industry navigates this challenging environment. The industry must remain vigilant, adapting to the changing consumer landscape and bracing for potential headwinds.
A recent seminar organized by The Textile Association of India (TAI), South Gujarat unit, held at the Baghban Kratos Club in Surat, highlighted the immense potential for Surat to emerge as a major export hub for man-made fiber (MMF) products in India. The seminar, titled "Opportunities in Exports in MMF Products," drew an impressive attendance of over 150 participants, including manufacturers, exporters, traders, and representatives from trade associations and academia, with delegates also present from Vapi and Mumbai.
The keynote speaker, Gurudas Aras, Strategic Advisor and Independent Director, whose presentation formed the crux of the insightful session, emphasized the significant global shift towards MMF consumption. Aras pointed out that MMF currently accounts for approximately 67% of global fiber consumption, with polyester dominating at 85%. Furthermore, the global trade in MMF products is witnessing the highest growth in categories like knitted garments, bedsheets, and woven garments.
Despite this global trend, India's share in the global textiles and apparel (T&A) trade has stagnated at around 5%. Aras attributed this to India's continued reliance on cotton-based products, while the majority of international trade now revolves around MMF-based items.
The presentation by Aras shed light on the dominance of China in the top 10 globally traded commodities within knitted and woven categories, with a staggering 40% to 60% share. Other significant players include Vietnam, Bangladesh, Cambodia, Turkey, and Germany, holding subsequent ranks across various HSN codes. India's global share in different MMF categories currently ranges from a modest 0.2% to 3%, with a few exceptions.
However, the ongoing trade tensions between the US and China present a significant opportunity for India. Aras highlighted that nearly 28% of India's current textile exports are directed towards the USA. There exists excellent potential to increase exports in specific MMF product categories where the US currently imports substantial quantities from China. A detailed list of such products was presented during the seminar.
Aras further elaborated on how the comparatively lower US tariff of 27% could significantly benefit India, provided that critical issues are addressed promptly. These key areas include:
-
Capacity building in MMF raw materials: Enhancing domestic production capabilities for essential MMF inputs.
-
Reducing MMF raw material prices: Addressing the current 15% higher cost of MMF raw materials in India to improve competitiveness.
-
Capacity building in MMF-based apparel manufacturing: Scaling up and modernizing manufacturing units focused on MMF apparel.
-
Removing hurdles of Quality Control Orders (QCO): Streamlining regulations to allow access to cheaper MMF materials for value-added exports.
Aras stressed that tapping into the export market requires a distinct approach and urged the industry in Surat to cultivate an export-oriented culture. This necessitates strategic investments in modern technology, sustainable manufacturing practices, consistent quality control, maintaining high standards of shop floor hygiene, comprehensive worker training, and a strong focus on product development.
Promising product categories for MMF-based manufacturing and exports that Surat should actively pursue include activewear and sportswear, performance fabrics, hygiene products, home textiles, and technical textiles.
The presentation by Aras also showcased successful examples of India's global achievements in T&A products, such as MMF bedsheets and blankets from Panipat, Flexible Intermediate Bulk Containers (FIBC) or jumbo bags, kids' garments, knitted garments from Tirupur, knitted baby garments, and home textiles.
The world of casual apparel, once a clear-cut battleground between denim's enduring legacy and the utilitarian surge of cargos, is now a complex, crisscrossing landscape. Traditionally, these two categories have seen a cyclical rivalry, where the rise of one often coincides with the relative decline of the other. But in today's dynamic fashion environment, influenced by social media, celebrity endorsements, and shifting consumer preferences, the lines are blurring, and the trends are diverging across different markets.
While denim retains its iconic status, cargos are experiencing a significant resurgence, with a desire for comfort, functionality, and a touch of streetwear edge. However, this isn't a uniform trend.
Denim vs cargo playout in wardrobes
While denim enjoys global popularity, its manifestation varies significantly across different regions.
In the US, denim’s stronghold remains unwavering. "The market continues to show steady growth, with consumers showing a strong preference for fashion-forward and sustainable denim options," reflecting a blend of style consciousness and environmental awareness. However cargos are emerging strong, In the US, there’s a strong revival of the Y2K aesthetic, and cargos are a key component of that, states a report by WGSN, a trend forecasting firm. "The emphasis on practicality and a relaxed silhouette is resonating with younger consumers." This is reflected in the popularity of wide-leg cargos, parachute pants, and utility-inspired designs. For example, workwear brand Dickies has seen a massive rise in popularity, with demand for its classic 874 work pants and cargo styles growing. Their robust and durable designs are very popular. No wonder, denim, while still a staple is adapting with looser fits and vintage washes to stay relevant.
European consumers on the other hand prioritize quality and sustainability, leading to a stable demand for premium and eco-friendly denim. "The market is being shaped by a mix of fashion trends and sustainability demands," highlighting the region's commitment to responsible fashion. European markets, particularly in cities like London and Berlin, are embracing a more refined approach to cargos. "There's a focus on elevated fabrics and tailored cuts," explains a trend analyst from Euromonitor International. "Cargos are being styled with blazers and heels, reflecting a desire for versatile, smart-casual options." Denim, in contrast, is seeing a rise in sustainable and artisanal brands.
The Asia-Pacific region is a powerhouse of denim consumption, driven by rapid urbanization and rising disposable incomes. Notably, China's denim exports, valued at approximately $2.17 billion in 2021, underscore the region's important role in the global market. Rising disposable incomes, urbanization, and a growing middle class are boosting this growth. Also, the Asian market, especially in South Korea and Japan, is a hotbed of streetwear influence. "In these markets, cargos are seen as a statement piece, often featuring bold colors and oversized silhouettes," reveals a McKinsey & Company study. Denim, meanwhile, is seeing strong growth in premium and designer brands, with a focus on innovative fabrics and finishes.
The Indian market is very diverse. "Denim is a staple, but cargos are gaining traction, especially in urban youth segments," says a Technopak report. "The affordability and practicality of cargos are key drivers, particularly in Tier-II and Tier-IIIcities." The influence of Bollywood and global streetwear trends is shaping the market.
There are several key factors for these fluctuating trends. The resurgence of early 2000s fashion has pushed cargos into the spotlight. Their baggy silhouettes and utilitarian details align perfectly with this nostalgic trend. Comfort and functionality is another factor. The pandemic has shifted consumer preferences towards comfort and practicality. Cargos, with their multiple pockets and relaxed fits, offer both.
Also, the growing popularity of streetwear has blurred the lines between casual and high fashion. Cargos, with their urban edge, are a key component of this aesthetic. And influencers and celebrities are driving trends, and many have been seen sporting cargos. This has significantly boosted their popularity. Meanwhile consumers are more conscious of their environmental impact. This is driving a demand for sustainable denim and eco-friendly cargo options. Social media platforms like TikTok and Instagram are trend incubators, rapidly spreading fashion ideas and fueling demand.
Denim's rise a multifaceted phenomenon
The global denim market is projected to touch $121.50 billion by 2030. This growth underscores its undeniable strength. But what precisely fuels this rise?
Versatility and enduring appeal: Denim's inherent adaptability is a cornerstone of its success. "This growth is driven by consumers' increasing inclination toward fashionable clothing and the versatility that denim offers." From classic straight cuts to contemporary wide-leg styles, denim seamlessly transitions across various occasions, a quality that cargo pants, with their more utilitarian aesthetic, often struggle to replicate.
Nostalgia and style revival: The resurgence of flared and bootcut jeans, alongside baggy and oversized fits, taps into a powerful sense of nostalgia. These styles, championed by celebrities and influencers, resonate with consumers seeking both comfort and a touch of retro chic. "Flared jeans have been spotted on runways and in street fashion, reflecting their renewed popularity," demonstrating the power of fashion cycles.
Sustainability as a differentiator: In an increasingly eco-conscious market, denim brands are actively embracing sustainable practices. "Brands are responding by adopting eco-friendly practices, such as using recycled materials and implementing water-saving production techniques." This focus on responsible production gives denim a distinct advantage over cargo pants, which are often associated with fast-fashion and less sustainable materials.
Regional economic factors: The rapid urbanization and rising disposable incomes in Asia-Pacific are significantly bolstering denim consumption. "Factors such as rising disposable incomes, urbanization, and a growing middle class are contributing to this surge." This economic growth creates a fertile ground for denim brands to expand their market share.
Brand loyalty and iconic status: Companies like Levi Strauss & Co. leverage their iconic status and long history to maintain consumer loyalty. "CEO Michelle Gass remains optimistic about achieving the company's revenue targets, emphasizing the enduring consumer interest in denim and leveraging Levi's iconic brand status." This brand legacy is harder for emerging cargo pant brands to replicate.
Thus the future of casualwear is likely to see continued blurring of boundaries between denim and cargos. One can expect to see hybrid styles, such as denim cargos and cargo-inspired denim. The emphasis on comfort, functionality, and sustainability will continue to shape trends. "The key for brands is to be adaptable and responsive to changing consumer preferences," concludes the WGSN report. "The market is dynamic, and those who can innovate and stay ahead of the curve will thrive."
The denim-cargo conundrum is a testament to the ever-evolving nature of fashion. While the rivalry may continue, the lines are blurring, and the consumer is ultimately the winner, with a wider range of stylish and comfortable options to choose from.
As the global fashion industry evolves once-unchallenged legacy brands, the titans of the industry, now find themselves besieged. They are grappling with falling margins, sluggish supply chains that seem frozen in time, and a business model creaking under the weight of its own inefficiencies. Meanwhile, fast fashion disruptors continue their rise – leaner, faster, unburdened by the heavy baggage of tradition.
To truly understand the widening gap between these two worlds one needs a close look at sourcing-to-retail economics. Examining one of the oldest and most popular brands among the old guard – the iconic Levi’s 501 – reveals a stark and unsettling contrast with the cost-annihilating, demand-devouring systems that power fast fashion brands like Zara, H&M, and Uniqlo.
Legacy economics, the $84 black hole
As per data collated by David Birnbaum in the traditional paradigm, the factory gate price (FOB) of a pair of Levi’s 501 jeans is around $10. Yet, by the time those jeans make their journey from the factory floor to the consumer’s closet, sporting a retail price tag of $100, a mere $15.81 is attributable to the tangible costs of delivery and logistics. The remainder –almost $84.19 – vanishes into a vortex of overheads: aggressive marketing and advertising campaigns, margin-crushing markdowns on unsold inventory, and the ever-mounting costs of processing consumer returns. The approximate cost structure of a pair of Levi’s is highlighted in the table below.
Table: Legacy brand cost structure
|
Cost element |
In $ |
|
FOB (factory cost) |
$10.00 |
|
Agent commission |
$0.50 |
|
Freight & duty |
$1.91 |
|
Clearance & local transport |
$0.60 |
|
Product development loading |
$2.55 |
|
Distribution & store delivery |
$15.81 |
|
Retail price |
$100.00 |
|
Non-garment overhead |
$84.19 |
Source: Data collated by David Birnbaum
The table highlights a sobering truth: legacy brands often operate with a seemingly low factory cost. However, the actual value captured by the physical product is dwarfed by ballooning overhead. No wonder, the relentless cycle of deep discounting becomes a necessity for legacy brands attempting to clear excess inventory, further eroding margins, and potentially damaging brand perception in the eyes of consumers who come to expect frequent sales. This stands in stark contrast to fast fashion's model. The logistical and financial burden of extensive return policies, and the considerable expense of traditional, broad-reach marketing campaigns continue to relentlessly eat away profit margins.
Fast Fashion: Speed a weapon, efficiency an armor
Big fast fashion brands like Zara have meticulously engineered a radically different operational model, one built for speed and optimized for margin. With production cycles compressed to a mere 2to 4 weeks, and a pricing that reflect prevailing consumer trends rather than being anchored to rigid, legacy pricing formulas, they maintain unparalleled flexibility while drastically minimizing the ever-present threat of inventory risk.
Table: Fast fashion cost model (Zara, estimated)
|
Cost element |
$ range |
|
FOB (factory cost) |
$4.00–$6.00 |
|
Freight, duty, transport |
$1.00–$2.00 |
|
Store delivery & distribution |
$1.50–$2.00 |
|
Retail price range |
$25–$45 |
|
Non-garment overhead |
~$15–$25 |
Operating with a leaner markup, fast fashion brands achieve profits by ruthlessly controlling overhead costs. Instead of pouring vast sums into mass advertising campaigns, they cultivate trends through social media buzz, leverage granular store data analytics to predict and meet demand with laser-like precision, and employ limited-edition product drops that generate intense consumer excitement and rarely languish on clearance racks. This scarcity model reduces the pressure to resort to deep discounting to move product.
Table: Legacy vs. fast fashion a comparison
|
Key factor |
Legacy brands |
Fast fashion |
|
Production lead time |
Months |
2–4 weeks |
|
Inventory turnover |
Low |
High |
|
Marketing dependence |
High (brand & campaign driven) |
Low (trend & speed driven) |
|
Markdowns |
High |
Minimal |
|
Return rate |
Higher (longer product life cycle) |
Lower (short-term inventory) |
|
Tariff exposure |
High (centralized sourcing) |
Low (diversified, nearshored) |
|
Trend responsiveness |
Slow |
Near real-time |
Tariffs & transformation
What’s more, the vulnerability of legacy brands has been laid bare by external shocks, for example the recent tariff wars. The Trump-era tariff hikes, which added a $5–$10 to apparel landing costs, delivered a body blow to these companies. With their limited flexibility and often inflexible, centralized sourcing strategies, these increases could not be readily absorbed at the factory level, further reducing already-thinning retail margins.
On the other hand, fast fashion brands showed remarkable agility. Their diversified, multi-regional sourcing networks and embrace of nearshoring (e.g., production hubs in Turkey, Morocco, and Eastern Europe) allowed them to respond quickly, mitigating the worst impacts of the cost increase and maintaining a competitive edge.
Ways for legacy brands to compete
The road to renewed competitiveness for these established players isn't a technological challenge; it's a strategic imperative. Legacy brands can no longer afford to simply digitize their catalogs or tinker around the edges by shifting factory locations. They must embark on a fundamental reengineering of their core business models, embracing radical change across the value chain. To compete they need to:
Shorten manufacturing cycle: Transition from slow, seasonal production calendars to agile manufacturing models with regional production hubs to enable faster response to trends and reduce lead times.
Data-driven inventory management: Implement sophisticated, real-time demand forecasting systems powered by AI and machine learning to minimize overproduction, optimize inventory levels, and drastically reduce the need for margin-destroying markdowns.
Rethink marketing and brand building: Shift away from expensive, broad-reach brand campaigns towards more targeted, cost-effective strategies such as micro-influencer collaborations and authentic, product-led storytelling that resonates with digitally native consumers.
Reduce returns: Invest in good quality control measures, improve garment sizing accuracy, and elevate the post-purchase customer experience to minimize the costly reverse logistics associated with high return rates.
Nearshore and diversify sourcing: Diversify sourcing networks and embrace nearshoring to mitigate the risks associated with tariffs, geopolitical instability, and supply chain disruptions, while simultaneously improving delivery timelines and responsiveness.
The European Union's appetite for T-shirts remains robust, with consumption expected to grow steadily over the next decade, albeit at a moderate pace. However, the market is witnessing a significant shift, with imports playing an increasingly dominant role as domestic production falters. A recent market analysis reveals, the EU's T-shirt consumption is projected to reach 3 billion units by 2035, growing at a CAGR of over 0.6 per cent from 2024. While this signals continued demand, the growth rate indicates a deceleration compared to the past.
T-shirt consumption trends
In 2024, the EU consumed approximately 2.8 billion tees, much like the previous year. From 2013 to 2024, consumption volume increased at an average annual rate of over 2.1 per cent, demonstrating a relatively stable trend with some fluctuations. The market peaked at 3.2 billion units in 2022, before experiencing a slight dip in the following years.
Table: T-shirt consumption
|
Year |
Consumption volume (bn units) |
|
2013 |
2.2 |
|
2014 |
2.3 |
|
2015 |
2.4 |
|
2016 |
2.5 |
|
2017 |
2.6 |
|
2018 |
2.7 |
|
2019 |
2.8 |
|
2020 |
2.9 |
|
2021 |
3.1 |
|
2022 |
3.2 |
|
2023 |
2.8 |
|
2024 |
2.8 |
In value terms, the EU's T-shirt market reached $9.3 billion in 2024, a slight decrease from the previous year. Despite this, the overall consumption trend has remained relatively flat, with a peak of $11.3 billion reached in previous years. Germany, France, and Spain remain the largest consumers, accounting for 46 per cent of total EU consumption in 2024. Germany alone consumed 609 million units, followed by France (361 million) and Spain (335 million). Notably, Poland has seen the most significant growth in consumption, with a CAGR of +9.0 per cent from 2013 to 2024.
Imports grow as domestic production dips
While consumption remains steady, the EU's domestic T-shirt production has witnessed a sharp decline. In 2024, production fell to 281 million units, a 19.7 per cent drop from the previous year. This downward trend has been consistent since 2014, when production peaked at 594 million units.
To meet demand, the EU relies heavily on imports. In 2024, T-shirt imports reached 4.3 billion units, despite a -9.9 per cent decrease from the previous year. Over the period from 2013 to 2024, imports increased at an average annual rate of over 2.2 per cent, highlighting the growing dependence on foreign suppliers.
Table: T-shirt imports
|
Year |
Import volume (bn units) |
|
2013 |
3.4 |
|
2014 |
3.5 |
|
2015 |
3.6 |
|
2016 |
3.7 |
|
2017 |
3.8 |
|
2018 |
4 |
|
2019 |
4.2 |
|
2020 |
4.4 |
|
2021 |
4.9 |
|
2022 |
5.3 |
|
2023 |
4.8 |
|
2024 |
4.3 |
Germany, Spain, and France are the largest importers, collectively accounting for 72 per cent of total EU imports. Specifically, Germany imported 879 million units. Spain 608 million units, France 462 million units, Netherlands 405 million units, Italy 366 million units and Poland 362 million units. In fact, Poland has shown the highest growth rate, with a CAGR of over 10.0 per cent from 2013 to 2024.
The Asian share
A significant portion of the EU's T-shirt imports originates from Asia. While precise, publicly available breakdowns for all Asian countries are limited, it's widely acknowledged that China, Bangladesh, India, and Vietnam are key suppliers. Based on general trade data and industry reports, it can be estimated that:
China: Remains a major supplier, though its share may be gradually shifting due to rising labor costs and diversification of sourcing.
Bangladesh: Is a prominent player, known for its large-scale garment manufacturing and competitive pricing.
India: Contributes significantly, with a growing focus on value-added products and sustainable practices.
Vietnam: Is an increasingly important source, benefiting from trade agreements and expanding production capacity.
Rest of Asia: other Southeast Asian nations contribute a growing percentage of the imports.
Estimating Asia’s share
It is estimated that the Asian region accounts for over 60% of the EU's total t-shirt imports. This highlights the EU's reliance on Asian manufacturing for its apparel needs.
Cotton tees dominate the import market, making up 82 per cent of total imports in 2024. This segment has also seen the fastest growth, at a CAGR of over 2.7 per cent from 2013 to 2024. The average import price of a T-shirt in the EU was $4.1 per unit in 2024, down -5.6 per cent from previous year. Prices vary significantly by product type and country of origin.
Dichotomy of EU’s T-shirt consumption
There is apparent dichotomy between EU’s T-shirt consumption and import volumes, where imports significantly exceed consumption. This is due to several factors. Re-exports is one reason. A substantial portion of imported T-shirts may not be intended for final consumption within the EU. Instead, they could be re-exported to countries outside the EU. The EU acts as a major trade hub, with goods flowing in and out. This means that import figures can be inflated by transit goods.
Large retailers and distributors within the EU often import large quantities of T-shirts to maintain inventory and ensure efficient distribution. These imports may not be immediately reflected in consumption figures, as they are stored in warehouses awaiting sale. Therefore, import numbers will reflect the amount of goods coming into the EU, where consumption numbers reflect what is sold to the end user.
Moreover, the modern apparel industry relies on complex global supply chains. T-shirts may be imported in bulk for various stages of processing, such as printing, labeling, or packaging, before being distributed to retailers. This can result in multiple import entries for the same products.
There can also be discrepancies between import and consumption data due to differences in data collection methods, reporting periods, and product categorization. Also, ‘consumption’ can be a hard figure to pin down, as it relies on many different data sources.
Also, retailers sometimes import more goods than they end up selling. This leads to overstocking, and these goods are still counted in import numbers, but have not been consumed. In essence, the higher import volumes don't necessarily mean that EU citizens are consuming more T-shirts than the consumption figures suggest. Rather, it reflects the EU's role in the global trade network, the complexities of modern supply chains, and potential statistical differences.
However, the data clearly indicates a changing EU T-shirt market. While consumption continues to rise, albeit at a slower pace, the decline in domestic production and the rise in imports, particularly from Asia, highlight the increasing globalization of the industry. Factors such as cost competitiveness, supply chain efficiencies, and evolving consumer preferences are likely driving these trends. The market is expected to continue growth, but its reliance on imports, heavily influenced by Asian suppliers, is set to increase, reshaping the industry landscape in the years to come.
As trade tensions between the US and China persist, a new battleground has emerged: social media platform TikTok. Chinese manufacturers are using viral videos to expose the supply chains of luxury goods, fashion, and apparel sold at significantly higher prices in the US. This strategy, dubbed 'Trade War TikTok' by some observers, appears to be a two-pronged approach aimed at disrupting traditional retail channels and simultaneously attracting American consumers to China through a new tourism initiative.
Exposing supply chains and price discrepancies
TikTok is currently flooded with videos purportedly revealing the origins of popular US brands. One viral video, viewed nearly 10 million times, features a woman in a factory showcasing yoga pants, claiming they are made in the same facility as Lululemon's but available for a mere $5-$6 compared to the US retail price of around $100.
Similarly, other videos display Louis Vuitton-style bags being offered for $50, with the presenter claiming they originate from the same manufacturers as the luxury brand. These videos often highlight the supposed minimal difference between branded products and their cheaper, unbranded counterparts, suggesting that the primary cost driver is the brand label itself.
Luxury brands push back, counterfeiting concerns rise
Luxury brands have been quick to refute these claims. Louis Vuitton, for instance, has consistently stated that none of its products are manufactured in China. Lululemon clarified that only around 3 per cent of its finished goods are made in mainland China, providing a list of authorized suppliers on its website.
Experts like Conrad Quilty-Harper, author of "Dark Luxury," suggest that many of these TikTok videos are likely promoting counterfeit or "dupe" goods rather than genuine products. "They're trying to conflate fake manufacturers in China with the real ones," Quilty-Harper explained. "They're very clever with their social media, and they're very effective at driving demand in the West."
Despite denials and expert scepticism, the allure of significantly lower prices has resonated with many TikTok users. Comments on these videos range from disbelief to excitement about potentially bypassing hefty retail markups.
China's dual strategy
This increase in 'Trade War TikTok' activity coincides with two significant moves by China.
D2C e-commerce exports: Chinese manufacturers are leveraging platforms like TikTok, DHgate, and Taobao to sell directly to American consumers, cutting out US retailers. This strategy aims to circumvent the increased tariffs imposed by the US, which currently stand at 145 per cent on many Chinese goods. By offering prices significantly lower than US retail, even after accounting for potential import duties and shipping, Chinese sellers hope to gain a competitive edge. Apps like DHgate, known for selling Chinese "dupes" of luxury goods, have got a popularity boost in the US.
Attracting buyers to China: China has recently announced a significant boost to its tourism sector, seemingly aimed at enticing international shoppers, including Americans. Key elements of this strategy include extended visa-free stay. The duration of visa-free stays for tourists from several countries, including potentially the US in future expansions, has been increased. Moreover, as of April 8, 2025, a nationwide rollout of a revamped Value Added Tax (VAT) refund mechanism allows foreign tourists to receive refunds instantly at the point of sale at designated tax-free retailers, rather than waiting until departure. The minimum eligible purchase is yen 500 per shop per day. As Li Xuhong, Vice President and Professor at the Beijing National Accounting Institute points out, the nationwide implementation of the instant VAT refund would "elevate China's tourism service standards and foster a 'friendly, efficient and convenient' tourism environment."
The combined impact of 'Trade War TikTok' and China's tourism initiatives could be significant. It could lead to disruption of US retail as the D2C approach threatens traditional US retailers by offering consumers the possibility of purchasing similar goods at drastically lower prices. This could lead to lower sales and pressure on US companies to reduce prices or justify their higher costs. The TikTok videos are forcing greater scrutiny of the often-opaque supply chains of luxury brands. Consumers are questioning the significant price differences and the actual value added by branding and marketing.
It could lead to the growth of counterfeit market. While some offerings might be from the same factories producing for major brands, there is a significant risk of a rise in the counterfeit market, potentially harming both consumers and brand reputation.
The simplified VAT refund process and extended visa-free stays could incentivize more foreign tourists to visit China and spend on retail goods, boosting the Chinese economy.
Also, this strategy can be seen as a direct response to US trade policies, attempting to undermine tariffs and shift economic power. The use of a popular social media platform like TikTok adds a new dimension to international trade disputes.
Is it a strategic move by China?
Analysis of Chinese official statements and social media sentiment suggests while the timing coincides with ongoing trade friction, Chinese sources see this as a strategic initiative to boost its global economic influence and shift away from a purely export-oriented model.
Official statements from the Ministry of Commerce emphasize the development of cross-border e-commerce as a "new engine for foreign trade," highlighting its role in directly connecting domestic producers with international consumers and fostering new growth points. Articles in state-backed media like the Global Times portray the tourism initiatives as a move to showcase China's economic dynamism and cultural appeal, attracting high-spending foreign visitors and boosting domestic consumption.
On Chinese social media platforms like Weibo and Douyin, there is a narrative of Chinese manufacturing prowess and the perceived "unfair" pricing of Western brands. Many users express pride in the quality of Chinese-made goods and see the direct-to-consumer model as a way to reclaim value and challenge the dominance of established international brands. Some view the TikTok strategy as a clever way to leverage social media to bypass traditional trade barriers and directly influence consumer behavior in key markets like the US.
However, there are voices within China that express caution regarding the potential for reputational damage due to the association with counterfeit goods and the need for stricter quality control and intellectual property protection to ensure the long-term sustainability of this approach.
Meanwhile, experts warn the majority of goods being promoted through these D2C channels are likely counterfeit. While some factories might produce components or even pre-assemble items for luxury brands, the final, branded products undergo stringent quality checks and are distributed through authorized channels. Purchasing from unofficial sources carries the risk of receiving inferior quality goods or supporting illegal counterfeiting operations.
In a strategic move to mitigate the impact of the US’ recent 26 per cent reciprocal tariff, India is considering offering zero-duty imports across several sectors, including those under the Production Linked Incentive (PLI) scheme, to expedite a crucial bilateral trade agreement (BTA). Officials familiar with the development indicate that this bold initiative aims to significantly boost bilateral trade, targeting a staggering $500 billion by 2030, while also addressing the immediate concerns arising from the US tariffs.
The Indian government's proposal, though generous, comes with stringent conditions, emphasizing rules of origin that mandate 30-40 per cent value addition and a change in tariff heading. These measures are designed to prevent the influx of third-country goods through the US, ensuring genuine value creation within the Indian manufacturing ecosystem. "Inter-ministerial consultations are actively exploring all potential avenues within the BTA, with a strong focus on the mutual benefits of zero-for-zero tariffs," revealed a source close to the discussions.
Textile and apparel sector, a key contributor
The textile and apparel sector, a significant component of the PLI scheme, is expected to play a crucial role in this trade realignment. With its inherent labor cost advantages, India is well-positioned to leverage zero-duty access to the US market. The sector's inclusion in the PLI scheme, with substantial financial outlays, has already boosted its manufacturing capabilities and competitiveness.
PLI scheme’s impact: The PLI scheme for textiles, with an approved outlay of Rs 10,683 crore, aims to enhance India's manufacturing capabilities in man-made fiber (MMF) apparel, MMF fabrics, and technical textiles. This initiative is expected to attract significant investments, boost production, and create numerous employment opportunities.
India-US textile trade: The US is a major importer of Indian textiles and apparel, with potential for substantial growth under favorable tariff conditions. According to India's Ministry of Textiles, The textiles & apparel contribut 12 per cent of India’s exports.
Competitive advantages: India's labor costs in the textile sector are significantly lower than those in the US and many other competing nations, providing a distinct competitive edge. India also has strong domestic raw material availability for cotton based textiles.
Potential impacts of zero-duty access
Most importantly it will increase export volumes to the US, leading to higher revenue and job creation. Also it will increase India’s competitiveness against other textile exporting nations. Investments into the Indian textile sector is expected to increase thereby boosting technological advancements and modernization. An increase in US investment inside the India’s textile market for finished goods can also be expected.
Meanwhile, the imposition of the 26 per cent reciprocal tariff by the US has raised concerns within the Indian export community. The proposed BTA and the offer of zero-duty imports are seen as critical steps to mitigate the impact of these tariffs and foster a more conducive trade environment.
BTA’s success hinges on the effective implementation of stringent rules of origin, ensuring genuine value addition within India. The Indian government must work closely with industry stakeholders to identify sectors where zero-duty access can be mutually beneficial. India must also focus on increasing the production of high quality textiles, as the US market favours them. It should pursue investing into more technical textiles, as that is a growing market.
Tiruppur's knitwear exports are projected to increase by 15 per cent in FY25-26. These exports had increased by 20 per cent to $4.8 billion in FY24-25.
KM Subramanian, President, Tiruppur Exporters' Association, states, knitwear exporters in Tiruppur are prioritizing green production by employing Zero Liquid Discharge (ZLD). They are recycling 34.3 million gallons of water daily, with 96 per cent being reused.
The association generates 2,000 MW through wind turbines and 250 MW via solar power. It utilizes 350 MW for the industry, while the remainder is supplied to the Tamil Nadu Electricity Board. Mindful of climate change risks, the association has planted 2.2 million trees with a 90 per cent survival rate. These initiatives have been a key in attracting international buyers from various countries with the association receiving more orders from the US and European countries, he adds.
Furthermore, Subramanian notes, the association anticipates a 15 per cent growth in exports in the current fiscal year. The federal and state governments should also provide support. Tiruppur's infrastructure needs to be improved to align with export growth. It is essential to offer bank loans with straightforward processes, along with subsidies and incentives.
A Sakthivel, Vice-Chairman, Apparel Export Promotion Council (AEPC), remarks, knitwear exports from Tirupur grew by 20 per cent in FY 2024-25. This achievement underscores the sector's sustained momentum and the strong global demand for Indian knitwear and apparel. This growth in knitwear exports is a highly encouraging sign, and this momentum will continue, despite global uncertainties. The association hopes to sustain this upward trend in the years ahead, he adds.
Sakthivel states, maintaining its upward trajectory, India's ready-made garment (RMG) sector registering a 10 per cent growth in exports during FY 2024-25. Total RMG exports in 2024-25 stood at $16 billion, with 49 per cent of exports originating from the knit sector, marking a significant increase from the previous year.
S\ Vijayakumar, an exporter, says, on a growth path for over a year now, Tiruppur's knitwear sector has been receiving large orders in frequently. This benefits large companies the most with some of the major US brands now looking to India instead of China.
However, India receives orders only after its competitors like Bangladesh and Vietnam have full order books. This happens mainly due to the cost difference. Hence, India needs to control its raw material prices, he adds.
Spinners face multiple interrelated challenges while selecting and processing yarns for a specific fabric end‑use. Below are the key issues around yarn properties and suitability—and proven strategies to overcome them:
1. Inconsistent yarn fineness (Linear Density)
Challenge: Variations in yarn count (eg: Ne, Tex) lead to uneven fabric hand, weight, and appearance.
Mitigation strategies:
- Automated monitoring: Implement real‑time laser or capacitive sensors on the drafting frame to detect linear density fluctuations and automatically adjust drafting zones.
- Controlled blowroom blending: Pre‑blend fibers to a tight specification (±1%) so upstream fiber variations are minimized before spinning.
- Quality feedback loops: Use post‑spin Uster evenness testing data to recalibrate card and draw‑frame settings.
2. Yarn strength and tenacity
Challenge: Insufficient tensile strength causes breakages during weaving or knitting, harming productivity.
Mitigation strategies:
- Optimized twist levels: Fine‑tune twist per inch (TPI) based on fiber staple length—higher twist for shorter staples to enhance cohesion, lower for long‑staple cotton to preserve softness.
- Fiber blending: Introduce small percentages of high‑tenacity fibers (e.g., polyester microfibers) into cotton yarns to boost strength without compromising hand.
- Process conditioning: Maintain optimal draft humidity (65–70% RH) to increase yarn tenacity and reduce static‑induced breakages.
3. Hairiness and Fiber Fly
Challenge: Excessive hairiness leads to pilling, reduced fabric clarity, and machine dust accumulation.
Mitigation strategies:
- Antipilling treatments: Apply Sirospun or compact spinning technologies to trap short fiber ends within the yarn core.
- Enzyme finishing: Use controlled cellulase enzyme treatments post‑fabric formation to trim protruding fibers.
- Air‑jet cleaning: Integrate air‑jet cleaning modules pre‑finishing to remove loose fiber fly.
4. Yarn imperfections (Thick/Thin Places, Neps)
Challenge: Thick and thin spots or neps show up as visible defects in fabric, impacting aesthetics.
Mitigation strategies:
- High‑resolution sensors: Deploy Uster Quantum or similar sensors at multiple process stages to detect and auto‑correct slubs and neps.
- Regular maintenance: Schedule routine cleaning and maintenance of carding flats and comb teeth to prevent fiber entanglement that causes neps.
- Optical sorting: In high‑value applications, use upstream optical fiber grading to remove immature or defective fibers before spinning.
5. Yarn hairiness vs. smoothness trade‑off
Challenge: While hairiness can create desirable “peach‑skin” effects, too much can ruin fabric drape and performance.
Mitigation strategies:
- Selective finishes: Balance mechanical (calendering) and chemical (silicone softeners) finishing to achieve target hairiness levels.
- Hybrid spinning: Combine ring and air‑jet spinning lines to develop core‑sheath structures—smooth sheath for handle, hairy core for bulk and effect.
6. Twist variability and torque
Challenge: Inconsistent twist distribution can impart skew or torque in knit fabrics, causing garments to twist or skew on the body.
Mitigation strategies:
- Precision twist stands: Use electronically controlled twist stands with closed‑loop feedback on torque sensors to keep twist uniform.
- Torque‑balanced plying: For plied yarns, apply S‑ and Z‑twists in equal measure and alternate ply directions to counteract residual torque.
7. Special functionality integration
Challenge: Incorporating features—moisture‑wicking, anti‑microbial, flame‑resistance—often alters spinning behavior and yarn hand.
Mitigation strategies:
- Microencapsulation: Use microcapsules with functional agents applied during fiber extrusion (for synthetics) to ensure uniform distribution and minimize impact on spin‑ability.
- Post‑spin coating: Apply plasma or chemical coatings post‑spin on compact lines to add functionality while preserving yarn integrity.
- Process trials: Run small‑batch trials to calibrate drafting, traveler speed, and drying parameters when adding finishes.
8. Cost vs performance optimization
Challenge: High‑performance fibers and processes can dramatically increase costs, squeezing margins.
Mitigation strategies:
- Strategic blending: Blend premium specialty fibers (eg: modal, Tencel) at low percentages (5–10%) into commodity polyester or cotton bases to achieve performance gains at controlled costs.
- Lean manufacturing: Adopt just‑in‑time raw material procurement and minimize inventory carrying costs, leveraging supplier consignment stock where possible.
- Value‑based pricing: Partner with brand customers on performance‑linked pricing models—higher price for guaranteed performance metrics.
By leveraging advanced monitoring, precise process control, and strategic material choices, spinners can optimize yarn properties for any desired fabric end‑use—ensuring consistency, functionality, and cost‑effectiveness across their product ranges.
