Turkey’s textile and apparel industry, long a pillar of the country’s export economy and the world’s fourth-largest textile exporter, is facing one of its most difficult periods in recent decades, according to Turkish financial news outlet Ekonomim.com.
Ahmet Öksüz, president of the İstanbul Textile and Raw Materials Exporters’ Association (İTHİB), a trade group representing Turkish textile producers, said production in the sector has dropped to just 50 to 60 percent of typical capacity, citing rising input costs and intensifying global competition.
He described the state of the industry as “deeply concerning,” noting that domestic manufacturers are being squeezed out by expensive inputs and cheaper imported goods. This pressure, he said, has weakened Turkey’s manufacturing base and reduced its global competitiveness.
Turkey has a 4 percent global market share in the textile sector.
According to trade data, Turkey exported $11 billion in textiles in 2023, a 10 percent decline from the previous year. The apparel segment recorded $19.2 billion in exports, also reflecting a contraction. Although Turkey remains a key supplier to European markets, both segments experienced notable declines last year.
Öksüz also criticized the misuse of Turkey’s Inward Processing Regime (DİR), a trade mechanism allowing companies to import raw materials tax-free for re-export. He said many of these imports are diverted into the domestic market without proper oversight, causing unfair competition and revenue losses.
“There needs to be stricter enforcement,” he said. “Authorities should at least require product sampling and, ideally, conduct inspections at the container level to ensure compliance.”
To curb such imbalances, the Turkish government imposed additional customs duties through a presidential decree issued in October 2023. The decree set rates ranging from 30 to 166.7 percent, depending on product categories. These new rates, covering goods under Chapters 51 to 63 of the country’s customs tariff schedule, took effect in November 2023. While the highest duties apply to select items, most yarn, fabric and apparel imports now face tariffs of between 13 and 39 percent.
Öksüz also talked about growing competition from Central Asia, particularly Uzbekistan. In 2024 Uzbekistan’s textile exports rose to nearly $2.9 billion, driven by a state-backed shift from exporting raw cotton to finished goods. The move has made Uzbekistan a direct competitor to Turkey in categories such as cotton yarn and ready-made garments.
Despite these pressures, Öksüz expressed optimism about the US market. He called for a preferential trade agreement to improve Turkish access, citing the $100 billion bilateral trade goal between Turkey and the United States. He argued that if the US shifts part of its sourcing from East Asia and Turkey restores domestic capacity, textile exports could increase by at least 20 percent.
Toygar Narbay, president of the Turkish Clothing Manufacturers’ Association (TGSD), which represents apparel exporters, said the sector posted losses in 2023, 2024 and the first four months of 2025. He cited rising labor costs, high interest rates and an underperforming exchange rate as major concerns.
Between 2022 and 2024, official inflation rose by 138 percent and minimum wages by 249 percent, while the central bank’s policy rate increased by 258 percent. However, the exchange rate rose only 101 percent in the same period, limiting exporters’ ability to absorb rising costs. The currency basket rose just 16 percent, further narrowing margins.
Narbay said garments produced in Turkey are now roughly 60 percent more expensive than those from East Asia and about 45 percent costlier than equivalents from North African countries. The central bank’s policy rate, raised to 50 percent in 2024, pushed compound interest rates to 63.2 percent, making financing particularly difficult for labor-intensive sectors like apparel.
The industry has also been hit hard by job losses. According to sector estimates, employment dropped below 1 million in 2024, down from more than 1.3 million, with over 65,000 jobs lost in a single year.
Narbay warned that without government intervention, many companies could exhaust their equity and face bankruptcy or court-led restructuring. He called for urgent support measures, including a 10 percent currency conversion incentive for net exports, reduced rediscount loan rates and a monthly wage subsidy of 2,500 Turkish lira per employee.
“Without these supports, the sector will struggle to stay globally competitive,” he said. “And its decline may ripple across Turkey’s broader export economy.”