21 November 2025, Mumbai
The recent revocation of Quality Control Orders (QCOs) on crucial Man-Made Fibre (MMF) inputs, including various polyester and viscose yarn types, signals a strategic pivot by the government to stabilize input costs for India's vast domestic apparel market, estimated at over $115 billion in 2024.
The mandatory BIS certification had caused domestic raw material prices to surge 10-30% above international benchmarks, a cost that disproportionately burdened Micro, Small, and Medium Enterprises (MSMEs) and was frequently passed down to the consumer.
Crisil's Value Chain pressure point
Crisil Ratings emphasizes the profound relief this grants to domestic value-fashion brands and retailers, despite noting the contrasting effect on the upstream segment.
Upstream polyester yarn manufacturers, facing increased competition from cheaper imports, are forecast to see their revenue growth flatten to 3-5% next fiscal year.
However, the free flow of cheaper, specialized yarn enables downstream manufacturers in hubs like Surat, which produce 50% of India's MMF textiles, to access better raw materials and stabilize pricing.
Fueling D2C and Tier 2/3 consumption
This stabilization is critical for the rapidly expanding digital commerce sector, where the online fashion market alone is projected to grow at a Compound Annual Growth Rate (CAGR) of over 22%.
Lower input costs allow D2C brands to optimize their margins and aggressively push affordable, trend-aligned MMF garments, directly fueling the massive consumer demand originating from Tier 2 and Tier 3 cities, which prioritize value and aspirational fashion.
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