AEPC chairman outlines roadmap for India's apparel export growth and sustainability
Established in 1978, the Apparel Export Promotion Council (AEPC) serves as the official representative body for Indian apparel exporters, with a mission to empower the garment industry and position India as a preferred destination in the global sourcing landscape. Headquartered in Gurgaon, with a registered office in Delhi’s Okhla and 10 regional offices throughout the country, AEPC acts as a dynamic bridge connecting Indian exporters to international markets.
The AEPC provides extensive support to the apparel sector, ranging from market research, trade policy advocacy, and technical assistance to design development, workforce training, and facilitation of participation in prominent international trade fairs. In a recent comprehensive interview with Fibre2Fashion, AEPC Chairman Sudhir Sekhri elaborated on key challenges facing the Indian apparel industry, the impact of geopolitical and trade developments, and AEPC’s vision for a resilient, globally competitive export sector.
On the current state of the Indian apparel industry, Sekhri noted that it remains a significant economic pillar, employing over 45 million people and contributing approximately 3 per cent of global apparel exports. However, growth in India’s textile and apparel exports has been modest over the past decade, with apparel and ready-made garments (RMG) registering a compound annual growth rate (CAGR) of only about 1 per cent from 2012 to 2023. He pointed to India’s relatively high production costs and limited participation in man-made fibre (MMF) based garment exports as key factors undermining competitiveness compared to countries like Bangladesh and Vietnam. The cost of production in India is higher by approximately 12-13 per cent for natural fibre-based apparel and 4-5 per cent for synthetic garments. This cost disadvantage is compounded by India’s lack of Free Trade Agreements (FTAs) with major markets such as the European Union (EU) and the United Kingdom (UK), unlike its competitors who enjoy duty-free access—an important factor influencing market share.
Despite these operational hurdles, Sekhri highlighted several promising developments. Government initiatives, including the Production-Linked Incentive (PLI) scheme and the PM MITRA textile parks project, seek to enhance cost efficiencies, promote MMF production, and establish integrated textile hubs. Sekhri emphasised the need for the Indian garment sector’s transition to MMF-based manufacturing, strengthening of skill development programmes, reduction of logistics costs, and the pursuit of favourable trade agreements. He also underscored sustainability and circular economy efforts as emerging differentiators on the global stage, urging investment in environmentally friendly textiles and advanced manufacturing technologies.
Addressing the rapidly evolving geopolitical landscape, Sekhri advocated for diversification of export destinations to reduce dependence on traditional markets such as the US and EU, which together constitute nearly half of India’s apparel exports and are subject to demand fluctuations. He suggested prioritising FTAs with key markets like the UK and EU to secure tariff advantages and expanding focus to emerging regions including Latin America, Africa, and the Middle East, where demand for affordable yet quality apparel is growing. Additionally, he emphasised moving up the value chain by targeting high-margin categories such as athleisure and technical textiles, while also reducing reliance on imported raw materials. Currently, India imports a significant proportion of its MMF and synthetic fabrics from China; enhancing domestic production in these segments could improve cost competitiveness. Sekhri also discussed the potential of e-commerce exports, which allow manufacturers direct access to global consumers amid a rapidly expanding digital fashion marketplace. Compliance with emerging sustainability regulations, such as the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) and Carbon Border Adjustment Mechanism (CBAM), was identified as critical to maintaining market access.
The recent announcement by US President Donald Trump on reciprocal tariffs, part of his ‘America First Trade Policy’, was addressed by Sekhri. These tariffs respond to concerns around trade deficits and declining US manufacturing output. India faces a 26 per cent reciprocal tariff, lower than the 34-46 per cent imposed on competitors including Bangladesh, China, and Vietnam. However, this relative advantage is being challenged by US buyers demanding substantial discounts of 15-20 per cent, which is unsustainable given the industry’s typical net profit margins of 5-6 per cent. Despite a 90-day pause provision offering some relief, the Indian apparel export sector is preparing for immediate difficulties. AEPC has formally requested government intervention to mitigate these impacts, proposing measures such as capacity augmentation via modifications to the PLI scheme, introduction of a simplified duty-free fabric import scheme, and the development of an urban employment encouragement plan to address labour absenteeism during peak periods. Furthermore, AEPC has called for financial support schemes, including an interest equalisation scheme for five years and dedicated export promotion and market diversification funds to bolster exports both to the US and non-traditional markets.
On the ambitious target set by India to reach $100 billion in textile and apparel exports by 2030—with $40 billion from apparel alone—Sekhri outlined a multi-faceted roadmap. Infrastructure development through the PM MITRA initiative, which envisages seven mega textile parks each spanning 1,000 acres, will strengthen manufacturing capacities. Expansion of the MMF sector is crucial, given projected global demand growth of 5-6 per cent annually in MMF-based apparel. FTA negotiations with critical markets such as the UK and the EU remain a priority to eliminate tariffs that currently disadvantage Indian exporters. Sustainability initiatives will be integrated, including the adoption of green factories, digital product passports (DPPs), and circular economy models to comply with global regulations. Research and development alongside automation will be promoted especially among MSMEs, which account for roughly 80 per cent of apparel production. Lastly, e-commerce exports leveraging platforms like the Open Network for Digital Commerce (ONDC) are expected to unlock significant opportunities within the $1 trillion global online fashion market.
Regarding support for small and medium-sized enterprises (SMEs), AEPC facilitates market access and capacity building through various schemes. The Market Access Initiative (MAI) provides subsidies for participation in major apparel exhibitions and trade fairs, reducing entry barriers for SMEs. AEPC organises trade delegations and reverse buyer-seller meets to foster direct business engagement with international buyers—for example, hosting Japanese buyers in February 2023 to explore sourcing opportunities. On capacity building, AEPC conducts skill development programmes, seminars, and webinars, while also offering market intelligence and advisory services to keep exporters informed of market dynamics and policy developments.
Skill development within the apparel manufacturing industry is supported through AEPC’s collaboration with institutions such as Apparel Training and Design Centres (ATDCs), delivering structured training under the Samarth Scheme of Capacity Building in Textiles Sector (SCBTS). Training focuses on garment construction, pattern making, quality control, and other essential competencies, equipping both workers and new entrants with industry-relevant skills aimed at boosting productivity.
On sustainability, AEPC is actively promoting alignment with eco-friendly and ethical manufacturing through regular webinars and seminars on Environmental, Social, and Governance (ESG) standards and global regulatory frameworks. AEPC advocates for policy measures such as the proposed Green Transformation Scheme, which would extend long-term soft loans at a maximum interest rate of 5 per cent with tenures ranging from three to ten years, enabling investments in water and energy efficiency, waste management, and renewable energy. The scheme further envisages encouraging tax incentives through double weightage for deductions under the Income Tax Act. Additionally, AEPC is lobbying for duty-free imports of textile and garment machinery, including environmentally sustainable technologies, to accelerate green transformation within the sector.
AEPC Chairman Sudhir Sekhri’s vision centres on building a future-ready, responsible, and resilient apparel industry. His leadership reflects a commitment to addressing cost competitiveness, market diversification, enhanced skill development, and sustainability, positioning India to achieve its export ambitions and strengthen its role in the global apparel trade.