Indian apparel exporters are facing mounting pressure as US buyers are seeking discounts of 5-10% across apparel categories, squeezing margins at a time when the sector is already grappling with weak demand, due to geopolitical disruptions and rising costs.
K.M. Subramanian, President of the Tirupur Exporters Association (TEA), said that enquiries from US buyers, which accounts for nearly one-third of India’s total apparel exports, continue to come in, but at “significantly lower price points.”
Sudhir Dhingra, owner of garment manufacturer Orient Craft, noted that “buyers placing orders for the Spring 2027 season are demanding discounts of up to 10%, leaving Indian exporters with little room to negotiate as rival sourcing destinations such as Vietnam, Indonesia and Cambodia continue to strengthen their position in global supply chains”.
India’s overall RMG exports declined for the sixth consecutive month in May 2026, falling 14.2% year-on-year in US dollar terms.
Despite the decline, exports to several key markets like the UK, UAE, Germany, Spain and Italy have grown, as India tries to diversify its export destinations. The Free Trade Agreements with the UK and Europe have also given some encouragement to apparel exporters.
Industry executives attribute the stronger performance in these countries to better cost competitiveness, more diversified product offerings, efficient supply chains, shorter lead times and greater buyer confidence.
Following the Israel-Iran ceasefire agreement industry participants are hopeful that geopolitical uncertainties and freight-related pressures will ease, supporting a recovery in global demand.
Industry leaders expect apparel export revenues to decline 3-5% in FY26 before rebounding 8-11% in FY27. Operating margins are projected to recover by around 200 basis points, reaching 9.5% in FY27. Market expectations are even more conservative, with apparel exporters’ FY26 revenues forecast to fall 6-9% and operating margins expected to compress to around 7.5%, compared with approximately 10% previously.
Bharat Tex Special Report 2026 
