Fashion
Global FDI dips 3% in H1 2025 amid weak investor sentiment: UNCTAD
The drop was driven by developed economies, where cross-border mergers and acquisitions (M&As)—which normally make up a large share of their FDI—fell 18 per cent to $173 billion, UNCTAD said in its latest Global Investment Trends Monitor.
Global FDI declined 3 per cent in H1 2025, marking a continued two-year slump as trade tensions, high borrowing costs, and geopolitical uncertainty curbed investor confidence, according to UNCTAD.
Developed economies saw an 18 per cent fall in M&As.
Greenfield and renewable projects dropped sharply, though AI-driven investments and sovereign wealth fund activity may aid recovery later in 2025.
Developing economies fared better overall, with flows remaining flat, though trends diverged by region. Inflows rose 12 per cent in Latin America and the Caribbean, 7 per cent in developing countries in Asia but fell 42 per cent in Africa.
High borrowing costs and economic uncertainty continued to squeeze investment in industry and infrastructure in H1 2025. Announcements of greenfield projects—when firms build new operations abroad—fell 17 per cent in number, driven by a 29 per cent decline in supply-chain-intensive manufacturing such as textiles, electronics, and automotives amid tariff uncertainty.
The international project finance—critical for infrastructure development—also declined, with deal numbers down 11 per cent and value 8 per cent. The trend was more positive in developing economies, where project finance deals fell only 2 per cent after two years of sharp declines. Despite fewer deals, the total value jumped 21 per cent, lifted by a few large-scale projects in Panama, the United Arab Emirates, and Uzbekistan. A broad recovery has yet to emerge.
Despite fewer projects, the value of global greenfield investment rose 7 per cent, lifted by major projects in artificial intelligence (AI) and the digital economy. For example, the United States recorded $237 billion in new greenfield projects in H1 2025—nearly matching the 2024 total and four times the past decade’s half-year average. More than half of the value came from AI-related sectors, particularly semiconductors (~$103 billion) and data centres (~$27 billion).
Investment in sectors critical to the Sustainable Development Goals (SDGs) continued to fall in early 2025. SDG-related investment projects in developing countries were down 10 per cent in number and 7 per cent in value, following steep declines last year. Projects in least developed countries (LDCs) are on track to fall another 5 per cent in 2025, possibly hitting their lowest level since 2015.
Internationally financed projects—including those in transport and utilities—remained about 25 per cent below the decade average. In LDCs, project finance in infrastructure fell another 85 per cent in value. Greenfield infrastructure activity declined 31 per cent in value and 25 per cent in number, led by sharp contractions in Latin America and the Caribbean (–78 per cent in value and –43 per cent in number).
Renewable energy investment, the largest SDG-relevant sector, also weakened. Globally, international project finance in the sector—which has accounted for nearly two-thirds of global totals in recent years—fell another 9 per cent in number and 10 per cent in value.
Global greenfield projects in renewable energy also declined 55 per cent in number and 21 per cent in value. In developing economies, projects fell 23 per cent. In LDCs, they declined by 31 per cent in number and 18 per cent in value.
Investment in water and sanitation fell 40 per cent, with no new projects in Africa or LDCs and a 97 per cent decrease in Latin America and the Caribbean. Only agrifood systems and health showed positive trends in developing economies, with investment holding steady in agrifood and rising 37 per cent in health, driven primarily by new projects in Asia.
The global investment climate will remain challenging through the rest of 2025. Geopolitical tensions, regional conflicts, economic fragmentation, and efforts to de-risk supply chains continue to weigh on flows. Still, easing financial conditions, rising M&A activity in the third quarter, and higher overseas spending by sovereign wealth funds could support a modest rebound by year-end.
Fibre2Fashion News Desk (SG)
Despite rising renewable installations, global textile decarbonisation remains slow and uneven.
Coal-heavy thermal processes, especially in large tier-2 facilities, continue to dominate emissions, while renewables still form a small share of total energy use.
Progress hinges on accelerating coal exit, electrification, and targeted action in high-impact facilities.
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Arvind Fashions Limited has reported strong Q3 FY26 performance, with revenue rising 14.5 per cent YoY to ₹1,377 crore (~$149.6 million), driven by robust direct-to-consumer growth.
EBITDA increased 18 per cent, with margin expansion to 14.2 per cent.
Retail like-to-like grew 8.2 per cent, online B2C nearly 50 per cent, while nine-month revenues reached ₹3,901 crore (~$424 million).
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From a global sourcing and export perspective, Sanjay Jain, Group CEO of PDS Ltd, welcomed the integrated vision outlined in the Budget. “As a sector that provides direct employment to over 45 million people and supports nearly 100 million livelihoods indirectly, these measures are both timely and impactful,” he said. Jain highlighted the thrust on public capital expenditure, champion MSMEs, Samarth 2.0 and Tex-Eco, adding that PM MITRA parks and cluster modernisation will help reduce import dependence and strengthen MMF apparel and technical textiles. “This Budget reinforces confidence in India’s journey towards becoming a globally integrated, high-quality manufacturing hub,” he said.
Highlighting supply-chain realignments, Priyavrata Mafatlal, vice-chairman of Arvind Mafatlal Group and MD of Mafatlal Industries, said the Budget improves planning visibility for manufacturers. “The thrust on fibre supply, scale and value addition will help stabilise input costs, improve margins and enable positive investment decisions,” he said. Mafatlal also welcomed the focus on skilling aligned with automation, digitalisation and AI, calling it essential to bridge the industry’s employability gap.
India’s textile and apparel industry views the Budget 2026–27 as a strategic signal focused on manufacturing depth, MSME-led growth and long-term competitiveness rather than headline announcements.
Industry leaders highlighted cluster revival, MSME financing, skilling and sustainability as key positives, while flagging unresolved concerns around power costs and fibre competitiveness.
Gautam Ganeriwal, executive director of Sitaram Spinners Pvt Ltd, said the Budget reflects learning from ground realities. “Every Budget needs to be read not for announcements, but for intent. From a textile industry lens, today’s Budget carries a clear signal: India wants manufacturing depth, not just manufacturing headlines,” he said. Ganeriwal highlighted the Integrated Programme for Textiles, revival of 200 legacy clusters, strengthened MSME finance through TReDS, and professional support via Corporate Mitras as meaningful interventions. However, he noted that cost competitiveness remains unresolved, citing power tariffs, cross-subsidies and fibre cost distortions, while calling for the removal of import duty on cotton and MMF raw materials.
From a policy and advisory lens, Kanishk Maheshwari, co-founder and MD of Primus Partners, said textiles have emerged as a spotlight sector. “The focus on modernised infrastructure and skill upgradation will provide a significant boost to foreign investments and link indigenous textile units to global value chains,” he said.
MSME-focused reforms were another major theme. Rohit Mahajan, founder and managing partner of Plutos ONE, said the ₹10,000 crore MSME Growth Fund marks a decisive shift from subsidies to scale-led competitiveness. “The integration of GeM with TReDS and the move to make receivables tradable as asset-backed securities directly address working capital challenges and lower the cost of capital for MSMEs,” he said, adding that such reforms will support tariff-resilient, export-ready enterprises.
Echoing long-term optimism, Nitin Jain, founder of Ivyn, said the revival of 2,000 clusters, creation of the MSME growth fund and establishment of mega textile parks signal sustained commitment. “These measures will modernise the textile and garment ecosystem, enabling scale, innovation and global competitiveness,” he said.
Industry stakeholders said that while the Budget sets a strong structural direction for textiles, garments and MSMEs, effective implementation, power-sector reforms and fibre cost competitiveness will be critical to translating intent into sustained growth.
New-age D2C fashion brands have welcomed the Budget, saying its export-oriented measures, cluster modernisation and sustainability focus create a stronger foundation for Indian brands looking to scale globally while building value-added manufacturing at home. Siddharth Dungarwal, founder of Snitch, said the Budget takes a decisive step towards positioning India as a global textile and apparel powerhouse. “The focus on export enablement, duty rationalisation for leather and synthetic goods, and the removal of the courier export value cap will significantly benefit brands and manufacturers looking to scale internationally,” he said.
Dungarwal added that the integrated policy approach covering fibres, skilling, cluster modernisation, sustainability and technical textiles reflects a long-term vision for the sector. “For new-age D2C brands and exporters, this Budget creates the right foundation to compete globally while building value-added manufacturing capabilities in India,” he said.
From the perspective of women-led D2C businesses, Tejasvi Madan, founder of Beyond Bound, said the Budget could go further in addressing the specific needs of emerging fashion exporters. She called for a dedicated export-readiness programme for D2C fashion brands, faster GST refunds and duty drawback timelines, and simplified cross-border payment and forex compliance.
Madan also highlighted the need for special credit lines and incubation support for women-founded apparel start-ups, along with plug-and-play shared manufacturing facilities and capital subsidies for flexible, small-batch production. “Incentives for sustainable and circular fashion, R&D support for next-generation fabrics, modern skilling for athleisure and technical apparel, and a ‘Made in India Activewear’ global branding mission would significantly accelerate responsible growth,” she said.
Industry observers said the Budget’s export facilitation measures and manufacturing-led focus provide momentum for India’s fast-growing D2C fashion ecosystem, while targeted policy refinements could further help home-grown brands compete in global markets.
Fibre2Fashion News Desk (KUL)
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