Starting a Garment and Textile Export Business in India

Did you know that India's textile and apparel exports were valued at over $34 billion in 2023? Making it one of the top global players in the industry. With demand soaring across markets like the United States, European Union, and the Middle East, small and medium-sized enterprises (SMEs) have a golden opportunity to expand their business beyond domestic borders.

But exporting isn't just about great products. Without the right registrations, pricing, buyer network, and logistics, even the best garments won't reach international customers. 

If you're wondering how to start a textile export business, this guide will walk you through everything—from setting up your business to finding buyers and ensuring smooth delivery. Let's explore why garment exports are a smart move for Indian SMEs and how to start a textile export business the right way.

Potential of Garment and Textile Exports in India

The global apparel market is expected to reach $2.3 trillion by 2030, creating new opportunities for businesses beyond the domestic market. While large exporters cater to bulk orders, SMEs can grrow by supplying specialized fabrics, niche products, and custom garments. Key advantages of exporting from India include:

• Cost-efficient production compared to many competing countries.
• Government incentives that lower financial and operational barriers.
• Growing demand for sustainable, organic, and custom-designed textiles.
• A broad product range catering to different international markets.

Indian exporters offer a diverse selection of fabrics and garments, including cotton, silk, linen, and synthetic textiles. Additionally, demand is increasing for value-added products like embroidered, digital-printed, and handwoven textiles, where SMEs can carve out a niche.

Now that we’ve explored the export potential, let’s take a look at how to establish a legally sound foundation for your business.

Also Read: List Of Profitable & Best Products To Export From India

Setting Up a Legally Compliant Export Business

Before you can start exporting garments and textiles, your business must be legally registered and compliant with export regulations. Missing even a single registration or document can lead to customs delays, payment issues, or even penalties. Here's everything you need to legally establish your export business in India.

1. Choosing the Right Business Structure

Your legal entity determines taxation, liability, and credibility in international trade. The most common business structures for exporters include:

• Sole Proprietorship: Easiest to set up but has unlimited personal liability.
• Partnership Firm: Suitable for businesses with multiple owners, but partners share liability.
• Limited Liability Partnership (LLP): A separate legal entity that limits personal liability.
• Private Limited Company (Pvt Ltd): Ideal for scaling and gaining investor confidence.

For exporters, a Pvt Ltd or LLP structure is recommended because it enhances credibility and protects personal assets.

2. Mandatory Registrations and Licenses for Exporters

To legally operate as a textile exporter in India, you must obtain the following:

• Import Export Code (IEC): Issued by the Directorate General of Foreign Trade (DGFT), this is a mandatory 10-digit code required for all export transactions. Without it, you cannot ship products abroad.
• Goods and Services Tax (GST) Registration: Required for taxation and compliance.
• MSME/Udyam Registration: Helps SMEs access government benefits, subsidies, and loans.
• Registration Cum Membership Certificate (RCMC): Required to avail export incentives. Obtain it from the Apparel Export Promotion Council (AEPC) or other relevant councils.
• Authorized Dealer (AD) Bank Registration: A designated bank to handle your export-related foreign exchange transactions under RBI guidelines.
• Export Promotion Council Membership: Provides access to trade fairs, buyer connections, and government incentives.

3. Additional Compliance Requirements

• Customs Registration: Your business must be registered with Indian Customs (ICEGATE) for smooth clearance of goods.
• Factory License & Environmental Clearances: Required if you own a manufacturing unit.
• Barcode Registration (if required): Needed for large-scale retail exports.

4. How to Register Your Export Business?

1. Apply for IEC on the DGFT website (takes around 5-7 days).
2. Register for GST through the GST portal.
3. Get RCMC from AEPC or the relevant export promotion council.
4. Set up an export-specific bank account and register it with the RBI.
5. Complete MSME/Udyam registration (if applicable).

Once your business is legally set up, the next step is to build a strategic export plan to ensure profitability and long-term success. 

Also Read: Applying for Import and Export License in India

Developing a Strategic Garment and Textile Export Plan

A well-defined plan ensures your garment export business is profitable and competitive. Without clear pricing, market research, and a buyer acquisition strategy, even high-quality products may struggle to sell.

1. Selecting the Right Market & Product

Identify high-demand regions like the US, EU, and the Middle East. Specializing in niche categories—such as organic textiles, luxury fabrics, or customized apparel—can give you an edge. Research trade regulations and tariffs in target countries to ensure compliance and cost efficiency.

2. Pricing & Profit Margins

Set FOB (Free on Board) or CIF (Cost, Insurance, Freight) pricing based on logistics and duties. Consider production costs, taxes, export incentives, and competitor pricing to maintain healthy profit margins.

3. Finding & Securing International Buyers

Use B2B platforms like Alibaba, IndiaMART, and Global Sources to connect with potential customers. Attending trade fairs and buyer-seller meetings organized by AEPC and other councils can help establish trust. Offering small trial shipments allows new buyers to assess product quality before committing to larger orders.

4. Branding & Digital Presence

Develop a professional website with a detailed product catalog. Maintain an active presence on LinkedIn and export-focused forums to attract buyers. Showcasing quality certifications enhances credibility and reassures potential customers about product standards.

A solid export strategy sets the direction, but now it’s essential to focus on establishing production processes and quality standards to fulfill demand.

Also Read: Pazago's Guide to Procurement in Supply Chain Management

Setting Up Production and Ensuring Quality Compliance

A reliable production setup ensures timely shipments and consistent quality—both critical for exports. Poor quality or delays can lead to financial losses and damaged credibility.

1. Sourcing High-Quality Raw Materials

The right materials impact cost, durability, and compliance. Buyers prefer certified, export-grade fabrics that meet international standards.

Key Sourcing Strategies:

• Work with multiple suppliers to ensure steady availability.
• Source from major textile hubs like Tiruppur, Surat, and Ludhiana.
• Verify compliance with OEKO-TEX, GOTS, and buyer-specific requirements.

2. Optimizing Production Efficiency

Whether manufacturing in-house or outsourcing, efficiency and quality control are non-negotiable.

Key Focus Areas:

• Use modern machinery for faster, consistent production.
• Train workers to reduce defects and improve quality.
• Monitor lead times to avoid shipment delays.
• Work with compliant factories following global labor and safety norms.

3. Meeting International Quality Standards

Buyers expect strict adherence to global benchmarks. Non-compliance can result in shipment rejection.

Important Certifications:

• OEKO-TEX 100: Ensures textiles are chemical-free.
• GOTS: Essential for organic cotton exports.
• ISO 9001: Confirms consistent manufacturing quality.
• WRAP: Verifies ethical and responsible production.

4. Packaging and Labeling for Export

Proper packaging protects products and ensures smooth customs clearance.

Requirements:

• Export-grade packaging to prevent damage.
• Country of origin labels (e.g., "Made in India").
• Care instructions and HS code labels per buyer regulations.

Now that your production is ready for export, let’s explore the necessary paperwork and procedures to ensure that everything moves smoothly across international markets.

Also Read: Procedure and Steps in Pre-Shipment Inspection and Quality Control

Understanding Export Procedures and Documentation

Incorrect documentation can delay shipments or lead to penalties. A smooth export process depends on having the right paperwork ready. Below are the key documents required for textile and garment exports.

1. Essential Export Documents

Every export shipment must include specific paperwork for customs clearance and buyer verification. Missing or incorrect documents can result in shipment delays or rejection.

• Commercial Invoice: Details product, quantity, price, and buyer information.
• Packing List: Specifies packaging details for customs inspection.
• Bill of Lading (Sea) / Airway Bill (Air): Proof of shipment and ownership transfer.
• Certificate of Origin (CoO): Required for trade agreements and customs clearance.
• Shipping Bill: Mandatory for export declaration with Indian Customs.
• Letter of Credit (LC) / Export Payment Terms: Ensures secure international transactions.
• Inspection and Compliance Certificates: Based on buyer requirements (e.g., OEKO-TEX, GOTS).

‍

2. Smooth Customs Clearance

Proper coordination with customs authorities prevents shipment delays. Following these steps ensures quick and hassle-free export clearance.

• Register on ICEGATE (Indian Customs Portal) for digital filing.
• Classify products correctly using HS codes to avoid tax complications.
• Hire a reliable customs broker to handle clearance procedures.
• Ensure accurate documentation to prevent unnecessary delays.

Now that you’re equipped with the necessary documentation, it’s time to reach out to international buyers and create lasting business relationships.

Securing and Retaining International Buyers

Securing reliable buyers is critical to sustaining an export business. A strong buyer network ensures consistent orders and long-term profitability. Without it, even high-quality products may struggle to gain market traction.

1. Where to Find International Buyers

Expanding into global markets requires a strategic approach. Exporters should explore multiple channels to connect with genuine buyers.

• B2B Marketplaces: Platforms like Alibaba, Fibre2Fashion, IndiaMART, and Global Sources connect exporters with verified international buyers.
• Trade Fairs & Sourcing Events: Exhibitions like AEPC's India International Garment Fair (IIGF), Texworld Paris, and MAGIC Las Vegas attract global apparel buyers.
• Export Promotion Councils: Membership with AEPC, TEXPROCIL, or SRTEPC provides access to buyer directories, trade delegations, and market intelligence reports.
• LinkedIn & Industry Networks: Direct engagement with sourcing agents, importers, and brand procurement teams.

2. How to Establish Credibility with Buyers

New exporters often struggle to gain trust in international markets. Establishing credibility is key to securing long-term buyers.

• Offer Sample Orders: Small trial shipments build trust before large-scale deals.
• Demonstrate Compliance: Share certifications like OEKO-TEX, GOTS, and ISO 9001 to validate quality standards.
• Maintain Competitive Pricing: Understand target market price points and adjust based on bulk orders.
• Ensure Transparency: Provide clear communication on production timelines, lead times, and payment terms.

3. Building Long-Term Buyer Relationships

A one-time order does not guarantee business sustainability. Consistently delivering value helps convert first-time buyers into repeat customers.

• Deliver on Time: Late shipments damage credibility and impact repeat business.
• Adapt to Market Trends: Stay updated on buyer preferences, sustainable materials, and design innovations.
• Offer Post-Sale Support: Address buyer concerns and ensure seamless transactions for bulk orders.
• Maintain Consistent Quality: Any deviation from approved samples can result in contract cancellations.

Once you’ve built a strong network of international buyers, it’s time to focus on sound financial planning and take advantage of export incentives.

Also Read: Important Documents Required for Export

Financial Planning and Export Incentives

Running a profitable garment and textile export business isn't just about selling products—it requires careful financial planning, efficient cash flow management, and taking advantage of government incentives to remain competitive.

1. Understanding the Cost Structure of Exporting

Many new exporters underestimate costs and struggle with pricing. A well-defined cost structure ensures profitable pricing without surprises.

Key Cost Components in Textile Exports:

• Raw Materials & Manufacturing: Fabric, trims, stitching, finishing, packaging.
• Logistics & Freight Costs: Shipping, warehousing, customs duties.
• Documentation & Compliance Fees: Export registration, quality certifications, customs broker fees.
• Bank Charges & Forex Fluctuations: Transaction fees, exchange rate variations.
• Marketing & Trade Shows: Business promotion, samples, exhibitions.

How to Control Costs?

• Negotiate bulk rates with fabric suppliers and logistics partners.
• Compare freight forwarders for the best shipping rates.
• Avoid last-minute air shipments by planning production timelines.
• Use trade finance options instead of depleting working capital.

2. Export Financing Options for SMEs

International buyers often pay 30 to 90 days after shipment, creating cash flow gaps for small exporters. To bridge this gap, various financial institutions provide export credit and working capital solutions.

Popular Export Finance Options:

• Pre-Shipment Finance: Covers raw material costs and production expenses before shipment.
• Post-Shipment Finance: Helps exporters manage cash flow while waiting for buyer payments.
• Export Packing Credit (EPC): Short-term loan to cover production and shipment costs.
• Bill Discounting & Invoice Factoring: Allows exporters to receive payments early by selling invoices to banks.
• Export Credit Guarantee Corporation (ECGC) Insurance: Protects against buyer defaults and non-payments.

Working with Authorized Dealer (AD) Banks helps exporters access government-backed trade finance solutions at lower interest rates.

3. Government Incentives for Textile Exporters

The Indian government offers various incentives to reduce export costs and encourage global competitiveness.

• Remission of Duties and Taxes on Exported Products (RoDTEP): Refunds embedded taxes that are not covered under GST, helping exporters price their products more competitively.
• Rebate of State and Central Taxes and Levies (RoSCTL): Specifically designed for textile and apparel exporters, refunding state and central taxes incurred during production.
• Duty Drawback Scheme: Allows exporters to claim refunds on customs duties paid for imported raw materials, reducing the overall cost of production.
• Interest Equalization Scheme (IES): Helps MSME exporters by offering lower interest rates on export credit, making funding more accessible and affordable.
• Export Promotion Capital Goods (EPCG) Scheme: Allows exporters to import machinery duty-free, enabling businesses to scale up production without heavy upfront investments.

Proper financial planning and taking advantage of export incentives reduce operational costs and improve profit margins.

With financial planning and incentives sorted, it’s now time to focus on the logistics and shipping strategies that will deliver your products to international markets.

Also Read: Pre-Shipment Inspection Cost Management: Pazago Insights

Building a Reliable Supply Chain for Your Garment Export

Delivering products to customers on time and in perfect condition is just as important as securing buyers. Shipping delays, damaged goods, and high freight costs can affect profitability and buyer relationships. A well-organized logistics strategy ensures smooth exports and reliable deliveries.

Choosing the Right Logistics Partner

Selecting the right shipping company is critical for timely and cost-effective deliveries. Exporters can choose between:

• Freight Forwarders: Handle all shipping arrangements, including booking cargo space, managing documentation, and customs clearance.
• Third-Party Logistics (3PL) Providers: Offer end-to-end logistics services, including warehousing, inventory management, and distribution.
• Direct Shipping Carriers: Exporters with frequent shipments may work directly with carriers.

Break Borders, Not Your Budget. Pazago helps you scale with reliable cross-border logistics at the best rates. Get a Quote Today!

How to Choose a Reliable Logistics Partner?

• Compare freight rates across different providers.
• Check experience in handling textile and garment exports.
• Verify global network coverage to your target markets.
• Ensure they provide real-time shipment tracking.

Understanding Incoterms for Exporting

Incoterms define who is responsible for costs, risks, and logistics in international trade. Exporters should be familiar with key Incoterms, as choosing the right Incoterm affects pricing and risk management. 

Managing logistics and supply chains is challenging, but with Pazago, export operations can be significantly simplified.

Also Read: Understanding Incoterms in International Trade

Simplifying Export Operations with Pazago

When learning how to start a textile export business, managing exports manually can lead to delays, misplaced documents, and poor shipment tracking. Pazago simplifies the process with a digital, all-in-one platform, making export operations more efficient and organized.

How Pazago Helps Exporters

• Digital Documentation: Generate, edit, and store invoices, packing lists, and shipping documents securely.
• Logistics & Insurance: Compare rates, book cost-effective shipping, and secure cargo insurance instantly.
• Quality Control: Connect with verified inspection providers for pre-shipment checks and compliance reports.
• Real-Time Tracking: Monitor shipments 24/7, receive updates, and prevent delivery delays.
• Easy Payments: Convert and receive international payments with stable exchange rates and no hidden fees.

Pazago reduces errors, speeds up processes, and improves reliability, making exports smoother for SMEs.

Conclusion

Starting a garment and textile export business in India may seem challenging at first, but with the right planning and effort, you can build a successful venture. The industry has great potential, and with India’s rich textile heritage, skilled workforce, and growing global demand, you have plenty of opportunities to grow.

If you're wondering how to start a textile export business, incorporating smart supply chain solutions can make all the difference. Pazago simplifies and automates export operations, helping businesses expand faster. Sign up today and streamline your export process effortlessly.

Get Started with Pazago Today – Simplify Your Textile Export Business!