India’s textile and apparel industry is entering a decisive phase of growth, with an ambitious target of achieving $100 billion in textile and apparel exports by 2030. Backed by initiatives such as the PM MITRA Parks, the Production Linked Incentive (PLI) Scheme, the National Technical Textiles Mission, and recent Union Budget measures, the country has significantly strengthened its manufacturing ecosystem and export competitiveness.

These policy interventions come at a time when global supply chains are diversifying beyond traditional manufacturing hubs, creating new opportunities for India to emerge as a preferred sourcing destination. With abundant raw materials, established textile clusters and a skilled workforce, India is well-positioned to capture a larger share of international markets.

However, according to Munindra Verma, CEO of M1 NXT, expanding production capacity alone will not be sufficient to achieve the country’s export ambitions. The real challenge lies in ensuring that textile manufacturers—particularly MSMEs—have the financial agility needed to sustain growth.

Working Capital Remains a Critical Constraint

The textile export business typically operates on extended working capital cycles. Manufacturers invest in raw materials, production, logistics and labour well before receiving payments from overseas buyers, with receivables often taking 60 to 120 days to be realised.

During this period, businesses must continue funding new production orders while managing supplier payments and operational expenses. For many MSME exporters, cash flow limitations rather than market demand have become the biggest obstacle to expansion.

The challenge has intensified amid geopolitical tensions, supply chain disruptions, fluctuating freight costs and evolving global trade policies, making liquidity management as important as manufacturing efficiency.

Policy Reforms Reflect Changing Priorities

Recent Union Budget announcements aimed at strengthening receivables financing, expanding the role of TReDS, and improving access to invoice discounting indicate growing recognition that faster access to working capital is essential for MSME growth.

While these reforms have improved domestic receivables financing, exporters continue to face more complex financing requirements due to longer international payment cycles, overseas buyer risks and cross-border transaction complexities.

ITFS Platforms Can Bridge the Financing Gap

Verma highlights the growing importance of International Trade Finance Services (ITFS) and export factoring platforms in addressing these challenges.

By creating digital marketplaces that connect exporters with multiple domestic and international financiers, ITFS platforms facilitate export invoice factoring, buyer’s credit and supply chain finance. Instead of waiting months for overseas payments, exporters can unlock liquidity against approved invoices, enabling them to maintain healthy cash flow without relying solely on conventional bank lending.

He also welcomes recent policy support for factoring products through the International Financial Services Centre (IFSC) at GIFT City, describing reforms around factoring capital requirements by the International Financial Services Centres Authority (IFSCA) as transformative for India’s export financing ecosystem.

Verma further suggests that mandatory onboarding of Status Holder exporters onto ITFS platforms could significantly accelerate adoption, similar to the progress witnessed with TReDS.

Unlocking India’s Export Potential

India’s factoring ecosystem remains relatively underdeveloped, accounting for less than 0.5% of GDP, compared with 20–30% of GDP in major economies such as China, Germany, France and Spain. Expanding access to export factoring could provide textile exporters with greater financial flexibility to procure raw materials, accept larger export orders and explore new international markets without placing excessive pressure on their balance sheets.

As India advances toward its $100 billion textile export goal, strengthening trade finance infrastructure will be as important as investments in manufacturing capacity, logistics and production. According to Verma, building a robust ecosystem around ITFS platforms and modern trade finance solutions could become a decisive factor in enhancing the global competitiveness of India’s textile MSMEs and sustaining long-term export growth.