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India’s textile and apparel (T&A) sector is entering a rare window of structural opportunity. Global brands are diversifying supply chains away from China, while Indian textile industry is benefiting from policy support through PLI and PM MITRA, improving trade access through the UK (GBP20bn apparel market) CETA and potential EU FTA (EUR200bn apparel market), and a resilient domestic demand base. While macro policy and demand tailwinds should support the broader textile sector, value creation is poised to concentrate at the apex of the value chain—ready-made garments (RMG). Yet the opportunity is not automatic: India’s apparel export share remains constrained (~3%) by fragmented garmenting capacity, longer lead times, limited man-made fiber (MMF) depth, higher working-capital intensity, and slower technology adoption versus China, Vietnam and Bangladesh.

In this report, we delve into the possibility of Indian players scaling up to the levels of global giants and becoming the growth engines for India’s target to capture the lion’s share of global textile value chain. Our analysis indicates that the next phase of value creation in the domestic T&A industry will favor scaled, compliant and executiondriven apparel manufacturers, rather than the broader textile ecosystem. Buyers are consolidating vendor lists around partners that can offer capacity, reliability, traceability, ESG compliance and multi-country supply resilience. This shifts the competitive debate from low wages to integrated manufacturing capability, speed-tomarket and balance-sheet discipline.

Within this framework, Pearl Global Industries (PGIL), Gokaldas Exports (GEXP), and KPR Mill (KPR) emerge as the primary listed Indian beneficiaries. Each brings in a distinct competitive edge: PGIL leverages a diversified, multi-country manufacturing footprint; GEXP benefits from aggressive capacity expansion and enhanced strategic positioning; and KPR demonstrates the operating leverage of large-scale vertical integration. These companies are poised to benefit from the changing industry landscape considering their proven operational execution capabilities, scalable manufacturing platforms, and clear trajectory toward global competitiveness. We initiate coverage on GEXP (BUY, TP: INR953) and KPR (Accumulate, TP: INR1,259).

Apparel industry dynamics

Global apparel market Characteristics

• Buyer-driven value chain: Global apparel industry is heavily controlled by large retailers who dictate product offerings and outsource manufacturing to low-cost developing countries.

• Asia-Pacific dominance: Driven by the massive manufacturing bases and surging domestic consumption in China and India, the APAC region stands as both the largest producer and the fastest-growing consumer market in the world.

• Luxury segment growing fast: While the mass and value tiers generate the highest sales volume, the luxury sector is experiencing the quickest value growth. This distinction is critical for Indian exporters, who primarily compete in the mass-to-mid-market segments, rather than luxury.

• Fragmented buyer base: Brand-level market concentration remains remarkably low. In 2025, the top 5 global apparel companies (Inditex, LVMH, H&M, Fast Retailing, and TJX) held a combined market share of only 7-8%. This fragmentation has historically prevented reliance on a single sourcing destination, allowing multiple low-cost manufacturing hubs to thrive simultaneously.

• Retail channels & agility: Brick-and-mortar stores still generate most sales. However, the rapid rise of ecommerce and social commerce is shrinking traditional lead times, giving a distinct competitive edge to manufacturers with highly agile and responsive supply chains.

Key trends in global apparel exports

• Automation and the changing labor-cost calculus: Apparel manufacturing has historically resisted full automation because garment assembly (as opposed to fabric or yarn production) remains difficult to robotize at scale – sewing flexible fabric is a harder machine-vision and dexterity problem than most discrete-parts assembly. This has preserved the labor-cost arbitrage as a durable advantage for that gives an edge to lower wage geographies. However, automated cutting systems, robotic material handling and AI-assisted quality control are increasingly standard at the largest manufacturers, raising the capital intensity required to compete at the top tier and modestly narrowing – without eliminating – the pure laborcost gap between China/Vietnam and lower wage alternatives.

• Sustainability and traceability as a vendor-selection filter: EU regulatory initiatives (the Circular Economy Action Plan, extended producer responsibility rules, and forthcoming supply-chain due-diligence requirements) are pushing global brands to demand verifiable sustainability credentials from vendors, not just price and lead time. Certifications and standards such as Global Organic Textile Standard (GOTS), OEKO-TEX and Bluesign, alongside renewable-energy adoption, are increasingly becoming important prerequisites for large-brand relationships rather than differentiators. Indian manufacturers investing early in verifiable, third-party-audited sustainability infrastructure are better positioned to be retained as brands consolidate vendor lists around fewer, larger, more compliant suppliers – a dynamic that favors large-scale operators as the compliance infrastructure itself carries meaningful fixed cost that smaller vendors struggle to absorb.

• E-commerce, social commerce and compressed lead times: Industry data shows offline channels still account for the large majority of global apparel sales value, but e-commerce and social-commerce channels are growing faster and are structurally compressing the time between design finalization and shelf-ready product. These favor manufacturers located closer to end markets or those with ability to deliver faster

replenishment orders alongside traditional bulk seasonal production – a capability that rewards flexible, well-invested factories over purely low-cost, low-tech ones.

• Fiber mix shifting toward synthetics: Coherent Market Insights data shows synthetic fibers holding roughly 68.9% of the combined global T&A market by material type, reflecting durability, cost and versatility advantages across both fashion and technical-textile applications. India’s export mix has traditionally been skewed toward cotton-based garments, which accounted for ~56% of garment exports in 2025, leaving the country relatively less aligned with the global shift toward MMF and synthetics. However, the mix is gradually evolving, with synthetic garments accounting for ~32% of India’s garment exports in 2025 and exports growing at 9% CAGR over 2020–25. This indicates a gradual realignment of India’s apparel export portfolio toward the faster growing global MMF opportunity.

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