Market Trends Positive 6

Walmart, Tesco Suppliers Lead 74% Rally as Retail Sourcing Pivots to India

Shares of Indian textile firms that supply to global retail giants like Walmart, Tesco, and Gap have surged up to 74% this year. New trade deals and a pivot from China are reshaping retailer supply bases, with large compliant suppliers capturing market share.

· 3 min read · By Retail Intelligence Brief

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Key takeaways

6 impact
Positivesentiment
3min read
  1. Shares of Indian textile firms that supply to global retail giants like Walmart, Tesco, and Gap have surged up to 74% this year.
  2. New trade deals and a pivot from China are reshaping retailer supply bases, with large compliant suppliers capturing market share.

In this briefing

Mentioned

Key Intelligence

Key Facts

  1. 1A Bloomberg equal-weight gauge of eight Indian textile exporters climbed over 30% in 2026 year-to-date, while the Nifty 50 declined 8%.
  2. 2SP Apparels Ltd. surged 60%, Arvind Ltd. jumped 74%, and Indo Count Industries Ltd. rose 54% in the same period.
  3. 3India implements its free trade agreement with the UK this month (July 2026), is concluding an EU deal, and progressing toward a US trade pact.
  4. 4Institutional investors including SBI Funds Management and Quant Mutual Fund raised stakes in textile companies in recent months.
  5. 5Motilal Oswal analysts noted global retailers are consolidating orders with large compliant Indian suppliers, forecasting disproportionate market share gains.
  6. 6Equitree Capital’s Pawan Bharaddia stated the sector should re-rate as Indian firms capture market share from Chinese competitors.
Arvind Ltd. Stock Surge YTD
74% +74% YTD

Supplier to Gap and other global retailers

With global retailers improving order visibility and brands consolidating toward large compliant suppliers, major Indian textile exporters are well-positioned to capture disproportionate market share in the upcycle.

Motilal Oswal Analysts Research Team

Note to clients

Analysis

For retail buyers and merchandising teams, the rally in Indian textile stocks is a leading indicator of where next season’s T-shirts and bed sheets will be made. With UK, EU, and US free trade deals imminent, global retailers are flocking to large Indian exporters, causing their stock valuations to jump 30%+ this year. That means more product sourced from India, potentially at competitive costs, but also concentration risk with a few big suppliers like Arvind and Indo Count.

Indian textile stocks have emerged as top performers in the country's equity market this year, with a custom gauge of eight key exporters surging more than 30% while the benchmark Nifty 50 index fell 8%. The rally is being powered by a confluence of favorable trade policy and global supply chain reconfiguration. India is set to implement a free trade agreement with the United Kingdom this month, is concluding a pact with the European Union, and is moving closer to a deal with the United States. These agreements are expected to slash tariffs and open lucrative Western markets for Indian textiles, a sector that already accounts for a significant share of global production but has lagged behind competitors like China and Bangladesh in export growth. At the same time, global retailers are actively reducing their sourcing dependence on China, creating a window for Indian manufacturers to capture outsized market share.

Arvind Ltd., which counts Gap among its clients, has jumped 74%, while bed linen exporter Indo Count Industries Ltd., supplying Walmart and Target, has gained 54%.

The optimism is tangible at the stock level. SP Apparels Ltd., a garment supplier to Tesco, has soared 60% in 2026. Arvind Ltd., which counts Gap among its clients, has jumped 74%, while bed linen exporter Indo Count Industries Ltd., supplying Walmart and Target, has gained 54%. These sharp moves have attracted institutional interest: large fund houses such as SBI Funds Management and Quant Mutual Fund have increased their positions in textile firms in recent months, signaling conviction beyond short-term trading. Pawan Bharaddia, co-founder and chief investment officer of Equitree Capital Advisors, argues the sector deserves a re-rating because "this is a real opportunity for Indian firms to grab market share."

What to Watch

Motilal Oswal analysts reinforced this view, noting that global retailers are extending and improving order visibility while consolidating purchases toward large, compliant suppliers—a trend that favors the scaled-up Indian exporters. These companies have invested in capacity and adherence to environmental and labor standards, making them preferred partners in a post-pandemic world where supply chain resilience is prized. The new trade deals directly enhance their cost competitiveness: the UK FTA removes a 4-10% duty on apparel, while a potential US deal could eliminate the 15-30% tariffs that have historically disadvantaged Indian textiles compared to duty-free imports from Mexico or Central America under existing US pacts.

Market implications extend beyond the immediate stock gains. With the EU and US deals still in negotiation, there is a runway for additional positive catalysts. The textile gauge’s 30% rise in the first half of 2026 suggests rapid price discovery, but if the sector genuinely re-rates to reflect a structurally larger export pie, multiples could sustain at higher levels. However, risks include execution delays in trade talks, competitive pressure from other Asian nations, and the possibility that elevated cotton prices could squeeze margins as demand surges. For now, the story is one of a long-overlooked industry finally aligning with India’s broader manufacturing push, offering both domestic investors and global supply chain strategists a compelling narrative.

Cite This Page

"Walmart, Tesco Suppliers Lead 74% Rally as Retail Sourcing Pivots to India." Retail Intelligence Brief, July 2, 2026. https://getretailbrief.com/story/india-textile-suppliers-retail-sourcing-shift-stocks

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