Mumbai: The Production Linked Incentive (PLI) Scheme for Textiles, launched in 2021, has emerged as a transformative initiative for India's textile industry. Operational from 24th September 2021 to 31st March 2030, the scheme offers financial incentives for a period of five years to promote manufacturing in Manmade Fibre (MMF) apparel, fabrics, and technical textiles, thereby enabling scale, competitiveness, and global integration.
The Ministry of Textiles has taken several proactive measures to ensure the success of the Scheme. It has expanded the coverage of eligible products by notifying additional HS Codes for Technical Textiles. In a significant move towards early support, the Ministry approved amendments on 20th February 2025, facilitating early disbursements amounting to ₹54 crore.
"The PLI Scheme is truly a game changer for our textile industry," said Mr. Gautam Kalra, Madura Industrial Textiles Pvt. Ltd., one of the Scheme's beneficiaries. "It's not just about financial incentives -- the Scheme has facilitated technology transfer and innovation in India's MMF and technical textiles sector."
Under the Scheme, the minimum investment threshold is ₹100 crore (Part 1) and ₹300 crore (Part 2), with incentive disbursements linked to achieving an incremental turnover of 25%over the previous year. Mr. Nikhil Datye, CFO, Nobel Hygiene Private Limited., another beneficiary, remarked, "The support under the PLI Scheme has enabled us to accelerate investments in automation, product development, capacity expansion, and employment generation."
Incentive payouts will cover five financial years (FY 2025-26 to FY 2029-30), based on performance in the FY 2024-25 to FY 2028-29 period, with a total budgetary outlay of ₹10,683 crore.
Till date, the Scheme has catalyzed:
* Investments of ₹7,343 crore
* Turnover of ₹4,648 crore
* Exports of ₹538 crore.
Technical textiles have emerged as a major focus area under the Scheme, accounting for 56.75% of the 74 selected applications, spanning 42 companies.
"The Scheme has rightly recognised the potential of Technical Textiles and Manmade Fibre Textiles by including a wide range of their products," said Mr. Shaleen Toshniwal, Chairman, MATEXIL (Manmade and Technical Textiles Export Promotion Council), the official EPC designated to promote exports in these segments.
By boosting production of high-tech products like auto safety equipment, glass fibre, and carbon fibre, the Scheme is not only driving foreign investment but also enhancing India's positioning as a competitive global textile hub. These materials are vital to high-growth industries, enabling India's textile sector to meet international standards and challenge established exporters like China, Vietnam, and Bangladesh.
Source: Business Standard
External affairs minister S Jaishankar on Monday met Chinese foreign minister Wang Yi in Beijing and flagged India's concerns over trade restrictions and lack of progress in economic cooperation. The meeting came amid China's curbs on rare earth magnet supplies to India. He also brought up the issue of faster de-escalation along LAC in eastern Ladakh and the two sides agreed to take additional practical steps, including travel to each other's country and direct flight connectivity.
Source: The Economic Times
India has run a merchandise trade deficit with five of the seven trade partners including two blocs it has free trade agreements (FTAs) with, ever since the pacts came into force, an ET analysis has shown. These trade partners collectively accounted for nearly 37% of India's total trade deficit in FY25. India has since 2021 entered into trade pacts with Mauritius, the UAE, European Free Trade Association (EFTA) and Australia. Its trade deficit with the UAE has expanded since 2022, but that with Australia narrowed.
Source: The Economic Times
The negotiations between India and the US for a proposed trade agreement are going at a fast pace, Commerce and Industry Minister Piyush Goyal said on Monday. The Indian team has reached Washington for the next round of talks on the first tranche of the bilateral trade agreement. "Negotiations are going on at a very fast pace and in the spirit of mutual cooperation so that we can come out with a win-win trade complementing agreement with the United States," Goyal told reporters here.
Source: The Economic Times
India could see a significant boost in its apparel exports to the United States amid ongoing tariff tensions involving key Asian exporters, according to a recent report by the State Bank of India (SBI). The report highlighted that India, which currently holds a 6 per cent share in the US apparel imports market, stands to benefit if it captures an additional 5 per cent share from competing countries. This potential gain could translate into a 0.1 per cent addition to India's GDP. The report noted that apart from its strong position in chemicals, India has a Revealed Comparative Advantage (RCA) in textiles and exports apparel and accessories to the United States. However, it faces stiff competition from countries like Bangladesh, Cambodia, Indonesia, and Vietnam in this segment. Of these, Vietnam currently enjoys a more favorable tariff structure. The report stated that for the other countries, Bangladesh, Cambodia, and Indonesia, the current US tariff structure places them at a disadvantage compared to India. It stated "India can capture apparel exports share of Bangladesh, Cambodia and Indonesia". The analysis is supported by US import data from 2024. The top five items the US imports from Bangladesh, Cambodia, and Indonesia prominently include "Apparel & Accessories," with Bangladesh contributing a massive 88.2 per cent of its US exports in this category, Cambodia at 30.8 per cent, and Indonesia at 15.3 per cent. These countries are now likely to face higher tariffs from the US, opening up a window of opportunity for India to expand its footprint. In addition to apparel, SBI's report identified further export growth potential for India in other sectors, particularly in countries affected by US tariff changes. These include agricultural goods, livestock and its products, waste and scrap, especially metal scrap, and various processed animal and vegetable products. The report concluded that India should actively leverage this trade shift and strengthen its export presence, especially in categories where it holds a comparative advantage. By capitalizing on emerging opportunities amid changing global trade dynamics, India can not only boost its exports but also drive incremental growth in its economy.
Source: The Economic Times
Negotiations for proposed trade agreements with the European Union (EU) and the US are going on, Commerce Secretary Sunil Barthwal said on Monday. He said that the free trade agreements (FTAs) which India is doing are one of the key enablers to promote global capability centres (GCCs) in the country. "...FTA with the UK was just announced (on May 6). with EU, which is going on, with the US, discussions are on," Barthwal said here at CII GCC Business Summit here.
India and the US are negotiating a bilateral trade agreement (BTA). They are targeting to conclude the first phase of the pact by fall (September-October) of this year. Similarly, India and the EU are also negotiating FTA. In June 2022, India and the 27-nation EU bloc resumed negotiations for a comprehensive free trade agreement, an investment protection agreement and a pact on geographical indications (GIs) after a gap of over eight years. It stalled in 2013 due to differences over the level of opening up of the markets. India and the EU are targeting to conclude the free trade deal by the end of this year. The secretary also said that today's agreements are different from the traditional FTAs, which were confined to traditional trade. The new pacts are a more complex set of agreements which include services also, he said. Now there is also an institutional mechanism in these pacts to look at issues like harmonsing regulations and standards; and resolving disputes, if any arises. And these are important facets of GCCs, he said, adding modern FTAs will lead to the innovation corridor, which will facilitate GCCs in India. The new trade agreements, Barthwal said, are addressing a whole gamut of issues, which could be one of the reasons why negotiations of these pacts take time to conclude. He added that in the FTA with the UK, there is a chapter on innovation, which was not the case earlier.
Source: The Economic Times
Higher US tariffs on key trading partners like China, Canada and Mexico could hand Indian exporters a significant competitive edge, especially in sectors like pharmaceuticals, textiles and electronics, according to a new report by NITI Aayog. In the latest edition of its Trade Watch Quarterly, the government think tank said that “India is expected to gain competitiveness in 22 out of the top 30 categories (HS 2 level), representing a market size of USD 2,285.2 billion.” These gains, it said, stem from steeper import duties imposed by the Trump administration–30% on China, 35% on Canada, and 25% on Mexico–making Indian goods relatively cheaper and more attractive in the US market. The report focuses on how evolving US trade and tariff structures are reshaping global trade alignments and what this means for India. It argues that the real opportunity lies in the shifting landscape. “India’s relative tariff advantage vis-a-vis major competitors presents a strategic window to expand market share in the US market, especially in sectors such as pharmaceuticals, textiles, and electrical machinery, among others,” the Aayog said. It added that capitalising on these openings will require agile policy responses from India. According to the analysis, India’s competitiveness remains unchanged in 6 out of the top 30 HS 2-level categories, segments that account for 32.8% of its exports to the US and 26% of total US imports, worth $26.5 billion. But the bigger story lies in the potential gains. In 78 products that make up more than half (52%) of India’s exports to the US, and a quarter of the US’s total imports, India stands to gain ground. These include minerals and fuels, apparel, electronics, plastics, furniture and seafoods, spanning a market worth $1,265 billion. However, India faces some headwinds. In six product categories, Indian exporters face a marginally higher average tariff (1–3%) than their competitors. These could be subject to negotiation. At a more granular level, in 17 of the top 100 products at the HS-4 level, accounting for 28% of India’s US-bound exports, the competitive position remains unchanged due to the absence of any tariff differential. To boost its export play, the Aayog has recommended expanding productionlinked incentive (PLI) schemes to more labour-intensive sectors like leather, footwear, furniture and handicrafts. It has also called for rationalising industrial electricity tariffs by cutting cross-subsidies and increasing the use of renewable energy, moves that could lower manufacturing costs and improve export margins. On the policy front, it suggested following the India–UK model and negotiating a services-focused trade deal with the US. This pact, the report said, should include strong provisions on digital trade and target sectors like information technology, financial services, education and professional services. “The agreement should include robust provisions for digital trade, creating a framework for enhanced cross-border service delivery,” the Aayog said. Meanwhile, a team from India’s commerce ministry has landed in Washington for another round of talks on the proposed bilateral trade agreement (BTA), with negotiations kicking off Monday. The two sides are aiming to conclude an interim deal by the fall, with the broader agreement expected to take shape in the months ahead. The timing is critical. The US has extended its deadline to impose additional tariffs on several countries, including India, until August 1. The last round of India–US trade talks ran from June 26 to July 2. Talks have resumed amid lingering disagreements in key sectors such as agriculture and automobiles. India has resisted US demands for duty concessions on agri and dairy imports, noting that it hasn’t made such concessions in any of its previous free trade agreements. It’s also pushing for the rollback of steep tariffs on Indian steel (50%), aluminium (50%), and automobiles (25%). Under World Trade Organization rules, India has kept the option of retaliatory tariffs open. Trump’s tariff blitz began with an announcement on April 2, targeting several countries including India. The move was deferred first to July 9 and then to August 1. As of July 7, the US had issued tariff letters to a wide group of countries—including Japan, South Korea, Indonesia, Malaysia, Thailand, South Africa and several others. The US wants duty relief on industrial goods, automobiles (especially EVs), wines, petrochemical products and a range of agricultural imports like dairy, apples, tree nuts and GM crops. India, in return, is pushing for concessions for its labour-intensive exports, including textiles, gems and jewellery, garments, plastics, chemicals, leather goods, shrimp, oil seeds, grapes and bananas. If a deal is struck, it could shift the equation in the world’s largest consumer market, and possibly mark a reset in the Indo–US trade dynamic.
Source: The Economic Times
Turkish trade sales volume increased by 19.2 per cent year on year (YoY) and 3.3 per cent month on month (MoM) in May this year, according to the Turkish Statistical Institute (Turkstat). In the same month, wholesale trade sales volume increased by 20.2 per cent YoY and 4.3 per cent MoM, while retail trade sales volume increased by 17.7 per cent YoY and 1.6 per cent MoM. Retail sales volume of textiles, clothing and footwear increased by 11.3 per cent YoY and 2.1 per cent MoM in the month, a Turkstat release said.
Source: Textile Insights
UK industrial production fell by 0.9 per cent in May 2025, following consecutive declines of 0.6 per cent in April and 0.2 per cent in March, according to the Office of National Statistics (ONS). The monthly downturn was mainly driven by a 1 per cent fall in manufacturing output, as 9 of the 13 manufacturing subsectors recorded declines.
Despite the broad weakness, the ‘machinery and equipment not elsewhere classified’ subsector posted a 3.4 per cent increase, offering some positive contribution to the overall figures. Looking at the broader trend, production output rose by 0.2 per cent in the three months to May 2025 compared with the three months to February 2025. This modest growth was attributed to a rebound from subdued activity in December and January, followed by a stronger performance in February.
Source: Fibre2Fashion
Net foreign direct investment (FDI) in Bangladesh rose to $864.63 million in the first quarter (Q1) this year—up by 114.31 per cent year on year (YoY), according to Bangladesh Bank data. This was driven by a sharp rise in intra-company loans and strong equity investments. The figure was 76.31 per cent higher than that between October and December last year.
The sharp rise was witnessed despite a 24.31-per cent YoY drop in reinvested earnings, suggesting that fresh capital injections and debt inflows are currently driving investors' interest, domestic media outlets reported. However, inflow of equity investments also rose significantly YoY to $304.38 million during Q1 2025 from $188.43 million in Q1 2024. Inflow of intra-company loans surged to $626.97 million, nearly two and a half times the $253.80 million borrowed by foreign firms here a year ago. Reinvested net earnings fell to $194.71 million in Q1 2025, down from $257.26 million a year ago. Outflows also increased, reaching $711.53 million during the quarter from $651.19 million during the corresponding quarter last year.
Source: The Economic Times
The European Union is looking to deepen trade agreements with India and other countries in the Asia-Pacific region as the bloc braces for US tariffs, a top official said. “We need to explore how far, how deep we can go in the Pacific area with other countries,” EU competition chief Teresa Ribera said on Bloomberg TV on Monday. “For instance, these conversations that are ongoing with India are quite important,” she said, referring to freetrade talks with the South Asian nation expected to be completed by year’s end. The EU is preparing to step up its engagement with other countries hit by US President Donald Trump’s tariffs following a slew of new threats to the bloc and other US trading partners, Bloomberg has reported. Ribera spoke from Beijing where she is visiting for two days of climate-focused talks with Chinese officials including Vice Premier Ding Xuexiang. Ribera’s meeting comes as Trump ramps up pressure on trading partners in the final weeks of negotiations ahead of his so-called reciprocaltariffs. While she suggested the EU will keep negotiating, the bloc will work harder to sell its wares to other places if the tariffs become a reality. “We need to keep on working to build resilience and to build partnerships with the other partners, the other allies in the world that are also open and willing to apply the rule of law,” said Ribera, an executive vice-president of the European Commission. That will “ensure that peaceful and Her visit will be followed by a EU-China summit next week, when EU and Chinese leaders may touch on thorny issues spanning trade and geopolitics. China has sought closer ties with the EU, but the bloc has raised concerns about Chinese industrial overcapacity, lack of market access for EU firms and Beijing’s support for Moscow after it invaded Ukraine. Other EU complaints include fresh export controls by China on rare earth magnets that have hit European industries. There’s also been little progress in resolving differences over the EU’s decision to impose tariffs on Chinese electric vehicles over claims producers have benefited from unfair subsidies. “It should not be a bottleneck killing the possibility of prosperity all over the world,” Ribera said in reference to China’s control over rare earths. “So that is another bullet where we will still need to talk, to discuss to avoid harm.” In an interview after she spoke on Bloomberg TV, Ribera said it was “still a little bit premature” to discuss a joint communique or declaration with China on climate cooperation but emphasized there was a shared willingness between Brussels and Beijing to deepen talks. The EU is reluctant to sign a joint declaration on climate action with China at a mid-July meeting because of concerns about the pace of emissions reduction by the world’s top polluting nation, the FT reported last week. The newspaper cited EU’s climate commissioner Wopke Hoekstra, who was quoted as saying China isn’t doing enough to commit to faster cuts.
Source: The Economic Times
Import cargo volume at the US’ major container ports is expected to rebound this month after a double-digit drop in late spring but is forecast to fall again after previously paused tariffs take effect, according to the Global Port Tracker report released by the National Retail Federation (NRF) and Hackett Associates. “The tariff situation remains highly fluid, and retailers are working hard to stock up for the holiday season before the various tariffs that have been announced and paused actually take effect,” said Jonathan Gold vice president for supply chain and customs policy at NRF. “Retailers have brought in as much merchandise as possible ahead of the reciprocal tariffs taking effect, and the latest extension to August 1 is greatly appreciated.” “Nonetheless, uncertainty over tariffs makes it increasingly difficult for retailers to plan, especially small businesses that have no capacity to absorb tariffs. Tariffs are paid by US companies, not foreign countries or businesses, and ultimately drive-up prices for American families while impacting the availability of products,” added Gold. “It is vital for the administration to finalise negotiations with our trading partners and provide stability and certainty for US retailers.”
The report stated that US President Trump recently signed an executive order delaying ‘reciprocal’ tariff until August 1 but also announced tariffs of up to 50 per cent on more than a dozen countries. The President indicated that he would send out additional letters to other countries. There are also questions about what happens with tariffs on China in August even though a deal was recently concluded. “A flurry of tariff-related announcements from the Trump administration has only served to further increase supply chain uncertainty,” said Ben Hackett, founder of Hackett Associates. “The global supply chain functions best in a trade environment that is smooth and predictable. Instead, it has been forced to contend with erratic policies and geopolitical volatility.”
US ports covered by Global Port Tracker handled 1.95 million twenty-foot equivalent units (TEU)—one 20-foot container or its equivalent—in May, the latest month for which final data is available. That was down a sharp 11.8 per cent from April and down 6.4 per cent YoY. It was also the first YoY decline since September 2023 and the lowest volume since 1.93 million TEU in May 2024.
Ports have not yet reported numbers for June, but Global Port Tracker projected the month at 2.06 million TEU, up 5.9 per cent from May but down 3.7 per cent year over year. July is forecast at 2.36 million TEU, up 2.1 per cent year over year; August at 2.08 million TEU, down 10.4 per cent year over year, and September at 1.82 million TEU, down 19.9 per cent year over year for the lowest monthly total since 1.87 million TEU in December 2023. October is forecast at 1.81 million TEU, down 19.2 per cent year over year, and November at 1.7 million TEU, down 21.3 per cent for the lowest total since 1.78 million TEU in April 2023. While the falling aggregative totals in August through November are related to tariffs, the large YoY percentage declines are partly because imports in late 2024 were elevated due to concerns about East Coast and Gulf Coast port strikes.
The current forecast would bring the first half of 2025 to 12.63 million TEU, up 4.5 per cent YoY. That’s better than the 12.54 million TEU forecast last month, but still below the 12.78 million TEU forecast earlier this year before the April tariffs announcement, added the report.
Source: Global Trade Magazine
Chinese firms grew less optimistic regarding future output in June. This was as expectations around profitability deteriorated for the first time since last June, according to S&P Global. Firms expect to raise charges only modestly amid rising competition while managing their costs, including via further reductions in headcounts. That said, R&D spending was projected to continue rising to support sales, albeit at a reduced pace. The net balance of Chinese firms that expect business activity to expand over the next year fell from 17 per cent in February to 11 per cent in June. This marked the lowest degree of confidence since June 2024 and was among the lowest on record. Additionally, optimism in China was below the global average of 24 per cent and the weakest of the BRICS nations, S&P Global said in its latest China Business Outlook survey.
Business confidence among Chinese companies has weakened in June 2025, with both manufacturing and services sectors reporting a broad-based easing in positive sentiment. The manufacturing sector posted a net balance of 7 per cent, while services stood at 15 per cent, signalling moderation in expectations for future activity.
Key concerns include global trade policy uncertainty and a subdued economic environment, which companies believe will generate weak demand in the year ahead. Firms also cited intense market competition and rising input costs as major headwinds to growth. Despite this, businesses expect government support and improved financial conditions to aid performance, along with enhanced R&D efforts and a potential recovery in domestic demand. Employment outlook has deteriorated significantly, with the net balance falling from −1 per cent in February to −3 per cent in June—marking the lowest level since February 2020. Both manufacturers (−3 per cent) and service providers (+3 per cent) expect staff reductions, indicating the first broad-based job shedding forecast in over five years. Capital expenditure and R&D projections have also hit record lows. The net balance for anticipated capex fell to +2 per cent from +7 per cent in February, the lowest since comparable data began in October 2009. R&D intentions dropped to +5 per cent, the weakest since tracking started in February 2019, added the survey.
Cost pressures, however, are forecast to ease. Input and output prices are still expected to rise, but at slower rates. The net balance of firms expecting higher staffing costs stood at +5 per cent—its lowest since records began in 2019—while non-staff cost expectations fell to a nine-year low of +5 per cent. Selling price expectations have softened considerably, with only a net balance of +1 per cent planning price hikes, the lowest since February 2024. Profit outlook has turned negative. With limited room to raise selling prices, the net balance for profitability dropped to −1 per cent in June from 5 per cent in February, the weakest reading since June 2024 and well below the global average of 8 per cent. “A further loss of confidence was observed among Chinese firms at the end of the first half of 2025. Optimism regarding future output slipped to the lowest level since last June, with sentiment among manufacturers at a more subdued level compared to their services counterparts,” said Jingyi Pan, economics associate director at S&P Global Market Intelligence.
“Despite expectations for slower cost increases, including via the management of salary outlays by reducing headcounts, Chinese businesses turned pessimistic regarding profitability in the year ahead. This reflected the challenges that companies anticipate regarding global trade and the ensuing impact on demand,” added Pan. “Overall, growth is still expected in the year ahead among Chinese firms as supportive policies and investment into new product launches are forecasted to drive sales. Even as firms planned to lower staffing levels, capital expenditure and R&D spending are reportedly set to continue growing, the latter at a rate that that remains above the global average.”
Source: Fibre2fashion
