India’s textile shares surge in 2026 amid strengthening trade agreements, a strategic move away from China, and a burgeoning domestic market, boosting investor confidence and sector growth prospects.
India’s textile shares have staged a sharp rebound in 2026 as trade deals, a shift away from China in global sourcing and improving demand revive confidence in the sector. The turnaround comes after a bruising stretch from 2021 to 2025, when weak discretionary spending, volatile raw material costs, high freight charges and supply chain disruptions hit margins and orders. But with inventories easing and consumption stabilising, brokerages are again taking a more constructive view.
The broader backdrop is encouraging. According to industry data from IBEF, India’s textile and apparel market was worth about $190 billion in 2025-26 and is projected to reach $350 billion by 2030, with exports expected to become a bigger growth driver. IBEF also says the sector employs more than 53 million people directly and is being supported by government schemes such as PM MITRA parks and the production-linked incentive programme. Separate industry estimates suggest India’s export target could reach $100 billion by 2030.
That optimism is being reinforced by trade policy. The India-UK comprehensive economic and trade agreement entered into force in July 2026, giving Indian exporters duty-free access to a large market for apparel and home textiles. Negotiations on an India-EU free trade deal were concluded in January 2026, while India has also signed an agreement with New Zealand that includes zero-duty access on textile lines. Together, these pacts improve market access and could help Indian companies diversify beyond the United States.
Companies with integrated manufacturing and export exposure appear best placed to benefit. Motilal Oswal says India’s cotton output is around 5 million tonnes and the country has about 43 million spindles, giving it an edge in cotton-to-garment production. Nuvama argues that while India may struggle to match Bangladesh on labour costs in garmenting, it can compete on scale, compliance, power costs and tariff parity. That makes vertically integrated players, rather than pure commodity suppliers, the most interesting names for investors.
Among the stocks attracting attention, KPR Mill, Gokaldas Exports and Indo Count Industries stand out. The lead article said KPR Mill posted 9.6% year-on-year revenue growth in the June quarter, with analysts expecting a recovery in textile demand and further support from branded apparel and garmenting expansion. Gokaldas Exports reported 24% growth, helped by strong ties with US retailers and a growing contribution from branded products, while Indo Count posted 26% growth, led by new businesses and its leadership in bed linen exports to the US. Analysts quoted by Elara Capital and ICRA say margin pressure from higher inputs should be temporary, but they also warn that policy shifts, tariffs and weaker global demand remain risks.
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