Global Fashion Giants Eye India: Will Tariff Reforms Accelerate FDI in Apparel?

India has the numbers, the scale, and the workforce to support the world's apparel demand.

- PAWAN GUPTA

With a market expected to grow at 10% annually and touch $350 billion by 2030 (according to IBEF), the country's textiles and apparel sector is already being closely tracked by global fashion houses looking to diversify beyond their traditional hubs.

India's strength also lies in its wide fiber base, skilled labor, and full value chain integration. From cotton farming to spinning, weaving, dyeing, and garmenting, India offers it all under one roof. This shortens lead times and improves supply chain control for brands used to managing multiple geographies for one product line.

Yet, the global apparel market is highly competitive, and decisions on where to invest or source from are based on very specific criteria such as tariff structures, cost stability, and policy clarity.

FDI in Apparel Despite these advantages, foreign direct investment into the sector has remained modest. Between April 2000 and September 2024, total FDI into textiles stood at $4.56 billion (DPIIT). That figure may sound decent on paper, but it does not reflect the real capacity the country has to absorb global capital.

Investors look for operating certainty. Input duties on fabrics or accessories, and machinery import costs, impact the overall cost structure. For many fashion labels, especially those in the mid- to high-end segment, even a 2-3% swing in cost per piece affects sourcing decisions. Countries that offer zero or low-duty imports for inputs tend to attract higher investments.