Festive-season demand is a key barometer of consumption in India. Discuss how input-cost inflation and import competition shape the pricing behaviour of domestic apparel firms.

The Navratri–Dasara–Diwali season sets the tone for India's apparel demand. A pre-Diwali 2026 survey of about 7,000 members of the Clothing Manufacturers Association of India (CMAI) found that 52% expect higher sales than last year [1]. However, prices are being set less by demand than by a squeeze between rising costs and cheap imports.

Input-cost inflation: absorb rather than pass on

• Textile inflation is estimated at 5–7%. Yet about 54% of firms are cutting margins, and only about 35% have raised prices [1]. Buyers are clearly price-sensitive.
• Costs created by policy: 76 textile products need compulsory BIS certification under Quality Control Orders (QCOs) [2]. Limits on fibre supply push input prices up.
• Uneven relief: exporters can import inputs without meeting QCOs under Advance Authorisation, EOU and SEZ routes [2]. Units that sell only in India get no such relief.
• Some relief ahead: raw-material prices have begun to soften, which may ease the pressure later in the season [1].

Import competition: a ceiling on prices

• Tiruppur garment makers report rising Chinese garment imports [1]. China's scale caps what domestic firms can charge.
• The industry is split: retailers gain from cheap stock, while manufacturers lose market share. "Industry optimism" therefore hides losers on the factory side.
• Uneven regional demand: the east was strong for Dasara, but Navratri sales were sluggish elsewhere [1]. This leads to discounting and pressure to clear stock.

What this means for pricing

• Sales volumes may rise even as profit per unit shrinks. Labour-intensive MSMEs with thin working capital are the most exposed.
• The survey measures expectations, not actual sales. It should be checked against GST and company results.

Way forward

• Rationalise QCOs on fibre and yarn, keeping only those needed for safety [2].
• Use anti-dumping duties via DGTR only when dumping is proven with data.
• Build scale through PM MITRA Parks and the PLI scheme for MMF and technical textiles [3].

Festive optimism hides a squeeze on margins: firms are protecting market share by giving up profit. Lower input costs at home, together with evidence-based trade defence, would let domestic firms compete on price and stay viable. That would sustain consumption-led growth and decent work (SDG 8) in India's garment clusters.