World MSME Day: Global uncertainty offers Indian MSMEs an opportunity to move up the textile value chain, say experts

India’s textile sector, which contributes 2.3% to the country’s gross domestic product (GDP), has been navigating a tough economic climate amid surging crude oil prices, low demand and steep raw material costs.

In fact, the sector continues to experience challenges relating to geopolitical tensions, changing trade dynamics, supply chain disruptions, and input cost volatility. As the second-largest employment generator in the country, the sector’s contribution to the economy is crucial, with MSMEs forming its backbone.

Looking ahead, experts say the Indian textile and apparel industry, estimated at $179 billion recently, is entering a phase where global uncertainty and structural opportunity co-exist. “These shifts are also accelerating opportunities for India to emerge as a preferred sourcing and manufacturing hub,” says Hemant Jain, Joint Managing Director, Kewal Kiran Clothing Limited.


Elaborating further, Jain adds that one of the most encouraging developments for the sector is the increasing diversification of global sourcing away from overdependence on single-country manufacturing hubs. “With international brands actively pursuing a ‘China Plus One’ strategy and trade agreements such as the India-UK CETA improving market access, India is well-positioned to leverage its manufacturing strength, skilled workforce, and integrated textile ecosystem to expand its share in global textile and apparel trade,” he says.

From the perspective of MSMEs, Jain adds that this period offers an opportunity to move up the value chain, embrace digital transformation, and become stronger participants in both domestic and global markets. “As one of India’s largest employment-generating sectors, textiles will continue to play a vital role in driving manufacturing growth, exports, entrepreneurship, and economic development in the years ahead,” he highlights.

Alluding to how opportunities exist to leverage in the present time, Pallab Banerjee, MD, Pearl Global Industries, says Indian exporters must remain nimble and competitive to capture business from other countries, such as Bangladesh, Cambodia and Vietnam. “This is a rare opportunity, and India’s scale and stability make it a preferred partner for UK customers. Disciplined execution and competitive pricing of raw material and labour will be important factors in sustaining this advantage,” he says, adding that while the overall sentiment remains positive, there is clear recognition that the operating environment has become more dynamic.

Banerjee notes that the Indian textile industry is at an important inflection point. “As global brands continue to reassess their sourcing strategies, India has a unique opportunity to strengthen its position as a preferred manufacturing destination. Our strengths lie in a well-established textile ecosystem, a large skilled workforce, growing manufacturing capabilities, and an increasing focus on sustainability and compliance,” he says.

Others in the industry speak of the ongoing challenges that include volatility in the pricing of raw materials and an increase in the cost of production, as well as working capital, which have been quite common in the past few years in the textile MSME segment. “It certainly opens up great opportunities for the MSMEs that concentrate on enhancing their efficiency, technology adoption, and manufacturing capabilities. Challenges would persist, but India’s textile MSME sector definitely has a bright future ahead,” says Chetan Mathur, CEO, Warp Weft Connect.

Mathur says that an interesting aspect for the textile sector in the current scenario is the increased interest of the global buyers in diversifying the supply chain in which they source products from different countries including India. “However, buyers today are not interested only in lower pricing. They want assurance on quality, compliance, sustainability, and delivery timelines as well. It is a great opportunity for us to look at,” he says.