The Indian textile industry’s capital expenditure reached its highest level in more than 14 years in the year ending December 2025, supported by new project announcements and an improving global trade environment, according to data analysed by the Centre for Monitoring Indian Economy.
Total new project announcements in the sector during the period amounted to Rs. 44,019 crore (US $ 4.87 billion), marking the strongest rolling four-quarter capital spend since at least 2011. Industry analysts attribute part of this investment surge to heightened confidence following recent trade developments.
The announcement of a trade deal with the United States, under which Washington has agreed to reduce tariffs on Indian textile imports from 50% to 18%, has boosted sentiment among exporters and investors. This adjustment is seen as enhancing the competitiveness of Indian goods relative to rival manufacturing hubs such as Bangladesh and Vietnam.
Manoj Mishra, a partner at Grant Thornton Bharat, noted that capital expenditure in the sector was likely being underpinned by expectations of more favourable trade terms, including provisions from a free trade agreement with the European Union that will eliminate a 12% tariff on textiles once it comes into effect.
Government support schemes have also played a role. The Production Linked Incentive (PLI) scheme for textiles, with an approved outlay of Rs. 10,683 crore (US $ 1.18 billion), seeks to encourage investment by both large enterprises and micro, small and medium enterprises. According to official data, participating firms have already made significant investments and reported substantial turnover and export figures.
Several listed textile firms have confirmed ongoing capital commitments, with Page Industries outlining plans for significant expenditure on facility expansions and Gokaldas Exports continuing investments across multiple states.
Independent market observers have highlighted that, while tariff uncertainties had previously weighed on some segments, the recent trade developments are likely to improve market sentiment and support further investment. Overall industry outlook remains cautiously positive, provided there are no significant reversals in current global trade conditions.
