Chennai/ Coimbatore: Indian garment exporters are hopeful of a recovery in orders and a moderation in key raw material costs following the US-Iran peace deal. The industry, which was severely impacted last year by the US tariffs, followed by the West Asia conflict, expects fresh orders from the US and other key markets to revive in the coming months.Despite broader growth in May, ready made garment (RMG) exports fell 14% in US dollar terms. The 4% decline in rupee terms shows weaker demand beyond rupee depreciation. The industry bodies attribute the fall to war-related uncertinaities and high base as the result of a rush to ship before the US tariffs took effect. The Tirupur Exporters Association (TEA) attributed it to demand moderation in the US, which accounts for nearly one-third of India’s total RMG exports.The Confederation of Indian Textile Industry (CITI) chairman Ashwin Chandran said uncertainty over the war and shipping challenges had dented demand, but he expected a recovery once the summer order cycle begins in August. “We expect this year to be stable to positive. While the exporters could benefit from rupee depreciation, higher input costs and dollar-denominated packing credits have impacted the industry,” he added.Karthick Jonagadla, smallcase manager and founder of Quantace Research, said a recovery from August is plausible but it is a sequenced recovery than a broad rebound. “The first leg from August should show up in the enquiry flow, order conversion and margin relief. Export data may follow with a one- to two-month lag. FY26 apparel-export revenues are still expected to fall 3%-5%, before rebounding 8-11% in FY27, with margins recovering by about 200 bps to 9.5%,” said Jonagadla.He added that war-related cost increases and delivery delays disproportionately hurt micro, small and medium players, which cannot absorb higher costs, longer lead times and margin contraction and potentially allowing some large players to gain market share from smaller units. “The street expects apparel exporters’ FY26 revenue to decline 6-9%, with operating margins compressing 200-300 bps to about 7.5% from 10%,” he added.Textile exports, which mainly consist of yarns and fabrics, rose 2.47% in May 2026 on better demand from Bangladesh and China. Apparel, however, declined for a second straight month, with April-May 2026 exports down 12.98%.
