Global T&A Sector Pulse
The second quarter of FY26 was marked by significant developments shaping the global textile and apparel industry. A key highlight was the US Section 301 investigation, which proposed a 12.5% tariff on imports from 60 countries including India, China, Bangladesh, and Vietnam. This has created uncertainty in sourcing strategies, with a public hearing scheduled for July before finalization. In contrast, India’s trade diplomacy advanced, with the UK free trade agreement set to take effect from July 15, removing 9.6% duties, while the US deal is reportedly “99% complete.” These moves are expected to accelerate sourcing shifts toward India. Meanwhile, easing tensions in West Asia brought crude prices down from $115/bbl to below $70/bbl, reducing freight surcharges and energy costs. India also temporarily suspended its 11% cotton import duty (June–October 2026), bridging a domestic deficit of ~45 lakh bales and improving competitiveness of cotton products.
Global trade flows reflected mixed momentum. US apparel imports fell 12% YTD (Jan–Apr), while home textiles dropped 20% YTD (Jan–Mar). China’s share in US apparel imports declined sharply from 22% in 2024 to 10% in 2026 YTD, while Vietnam and Bangladesh gained ground. India’s apparel exports weakened, down 12% YTD (Jan–May), with home textiles also declining 12% YTD (Jan–Mar). Among major exporters, Vietnam stood out with 13% growth, while India contracted.
Retail sales painted a contrasting picture. US apparel store sales rose 4% YoY (Jan–May), despite import declines, signaling inventory drawdowns and a likely restock in H2. UK apparel sales grew 6% in 2025, though online clothing sales diverged—US e‑commerce grew 2% in Q1 2026, while UK online sales fell 13% in Q4 2025.
Financial performance of Indian companies showed divergence between textiles and apparel. The Wazir Textile Index recorded a 9% sales decline and 8% EBITDA drop in FY26, pressured by high cotton and polyester costs, weak exports, and currency drag. In contrast, the Wazir Apparel Index grew 5% in sales, though EBITDA fell 12% due to input cost pressures. Textile majors like Welspun Living and Indo Count saw double‑digit declines, while apparel players such as PDS and Pearl Global added marquee accounts despite margin compression.
Looking ahead, Q3 is expected to benefit from easing fuel and fibre costs, UK FTA duty‑free access, and positive sentiment around US/EU trade deals. However, risks remain from monsoon weakness impacting rural demand.
Credits: PR received from Wazir AI Team <
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