For the textile and clothing industry, the last quarter of FY 26 and the first quarter of the current financial year have seen growth in demand, triggering investments.“After 2022, the industry saw demand picking up across the textile value chain from January to mid-May. There is a slowdown in demand now after withdrawal of the import duty on cotton. We hope the situation will stabilise in a month or so,” said K. Selvaraju, secretary generatl of the Southern India Mills Association.“All the good performers are investing now, expanding capacities. Investments are not decided based on the performance of two or three months. For the larger industries, the investments were planned at least seven or eight months before. They are looking at long-term growth,” added Chandrima Chatterjee, Secretary General of the Confederation of Indian Textile Industry.Yarn exports from October 2025 to March 2026 were higher compared with the same period the previous year in quantity. Export of fabrics picked up and then saw a slow down. Similarly, the spike in yarn prices did have an impact on garments and made ups for a few weeks. Now, the fall in cotton prices has again led to drop in demand.“When the market revives, it takes about three months for the entire supply chain to benefit. Cotton imports have crossed 40 lakh bales between October 2025 and May 2026. Another 15-20 lakh bales are expected to come in by the end of September. Cotton prices crossed ₹75,000 a candy and are dropping now. This has led to slowdown in demand. Everyone is waiting to see how much the prices will fall. The entire situation will be clear in the next few weeks,” added Mr. Selvaraju.Meanwhile, textile mills are said to be investing in both, modernisation and expansion projects though the exact investment data is not available. Some of the mills are investing to make value added yarns and some others are modernising and going in for more automation, say industry sources.Implementation of the Free Trade Agreement with the UK is expected to bring in more orders for garments and madeup. Another $10 billion increase in exports will support the entire textile value chain. However, the West Asia war and uncertainties in the US tariff are a matter of concern, the sources said. Published - June 11, 2026 09:16 pm IST