India's textile sector is experiencing a significant upswing, propelled by easing global tariff barriers and increased domestic demand. Recent trade developments, particularly a trade deal with the United States that reduces tariffs on Indian textile imports from 50% to 18%, have boosted confidence among exporters and investors. This adjustment enhances the competitiveness of Indian goods compared to manufacturing hubs like Bangladesh and Vietnam. The industry's capital expenditure reached a 14-year high in the year ending December 2025, supported by new project announcements and an improving global trade environment.
The Indian textile and apparel market is projected to reach \$350 billion by 2030, driven by domestic consumption, export diversification, and government support through schemes like PM MITRA Parks and the Production Linked Incentive (PLI) scheme. The PLI scheme, with an approved outlay of Rs. 10,683 crore (US $1.18 billion), encourages investment by both large enterprises and MSMEs. The market is currently ranked fifth globally, and the government is actively working to accelerate growth to 15-20% over the next five years. India's textile exports are projected to reach $45 billion by 2025, up from $38 billion in 2020, fueled by competitive manufacturing costs, a skilled labor force, and export-friendly policies.
Within this promising landscape, Arvind Fashions and Raymond Lifestyle emerge as top picks for investors.
Arvind Fashions: Arvind Fashions has demonstrated robust performance, with analysts forecasting the stock price to rise over the next 12 months. The average 1-year price target is INR 713.71, with a high forecast of INR 836.85. However, a recent downgrade in Mojo Grade from "Buy" to "Hold" suggests a need for cautious optimism, with investors advised to monitor price and volume action closely. Arvind Fashions delivered strong Q1 results, with revenue growth of 16% and an 8.1% increase in retail like-for-like (LTL) growth. Gross margin expanded to 55.9%, and net profit saw a substantial increase. The company's expansion strategy includes adding new Exclusive Brand Outlets (EBOs), increasing its retail presence.
Raymond Lifestyle: While Raymond Lifestyle has a strong brand presence, recent financial performance presents a mixed picture. The company's market capitalization stands at ₹6,046 Cr as of February 6, 2026. However, the company has shown a poor profit growth of -181.04% for the past 3 years. The PE and PB ratios of Raymond Lifestyle are 113.41 and 0.63, respectively, as of February 6, 2026. Recent results show a decrease in quarterly net profit, with a 7.2% year-over-year decline in December 2025. Despite these challenges, promoter holding has increased, and working capital requirements have reduced, indicating potential for future improvement.
The Indian textile industry is at a crucial juncture, poised for substantial growth driven by favorable trade policies and government support. While both Arvind Fashions and Raymond Lifestyle offer investment opportunities, investors should carefully consider the specific financial metrics and growth strategies of each company before making investment decisions.