Turkey is the textile and apparel industry’s middle child—easy to overlook between louder siblings. Geographically situated at the crossroads between Europe and Asia, it also sits in the sourcing middle: not cheap enough to compete with Asian basics, yet not premium enough for true luxury. Like many middle children, it must play to its strengths for differentiation. Turkey leans into vertical integration, proximity to key markets and fast lead times, plus the ability to respond to trends, adapt production, and invest in manufacturing innovation and sustainability.
But recent headwinds have been strong. The triple squeeze of 30% year-over-year inflation, rising wages and currency volatility has hurt Turkey’s edge, especially against aggressive Asian competition. In 2025, Turkish apparel exports fell 4.36%, and in recent years, thousands of manufacturing operations closed, hundreds of thousands lost jobs, and many workers took to the streets to fight for better working conditions and pay.
Yet Turkey’s textile and apparel industry is too big to fail. The industry represents 11% of the country’s total manufacturing output, 10% of total exports, and 5.4% of the national GDP. Turkey is the world’s 6th largest supplier of apparel, and the 5th largest supplier of textiles with a lead in denim textile and garment production. In 2025, the country exported $16.8 billion in apparel (mainly pants, dresses and jumpsuits) and $9.4 billion in textiles (woven fabrics, knits, yarns and fiber), according to the Istanbul Apparel Exporters Association (IHKIB).
A Nearshoring Advantage
Connected by a narrow strip of land, as well as the world’s longest suspension bridge, opened in 2022, Europe is Turkey’s most important export partner. The EU-Turkey Customs Union gives Turkish apparel duty-free benefits to the entire EU market—despite Turkey not being an EU member. Turkey is the EU’s 3rd biggest supplier after China and Bangladesh, with about $10 billion in apparel exports in 2025, and is the largest denim fabric supplier to the EU, and fourth in world rankings, according to IHKIB.
Contiguous borders with the EU also allow for international road freight. While it takes weeks for a container from the Far East to reach Europe, a truck leaving Turkey can reach Germany or France in 3–7 days, thus reducing buyers’ inventory risk and offering the agility to test items. As a result, Turkey can flex its strengths on quick turns, lean manufacturing and small batch production.
“When a European brand requests a collection of 500 units to test the market instead of 100,000, Turkey can fulfill this quickly,” said Burak Karaarslan, general manager of Taypa Textile, which produces garments for Levis, COS, Lacoste, Hugo Boss, Inditex and others. “In terms of ‘just-in-time’ production, Turkey is one of the world’s top players.”
But Turkey’s advantage in Europe is shaky. At February’s Premiere Vision Fair in Paris, Ahmet Öksüz, president of The Istanbul Textile and Raw Materials Exporters’ Association (İTHİB), stated that with an India‑EU free trade agreement set to take effect in 2027 that will erode Turkey’s EU Customs Advantage. Further, he said China is aggressively targeting the European market to offset U.S. losses. As a result, Turkey is turning its sights to the United States. But that’s not without its challenges.
When examining U.S. import duties applied to Turkey on a sectoral basis, a cotton T-shirt classified under HS code 6109.10 is subject to a base tariff rate of 16.5%. Add the 10% Section 122 tariff the U.S. applied uniformly to all countries, the total effective duty rate reaches 26.5%. Similarly, a polyester woven shirt under HS code 6205.30 has a base duty rate of 26.6%, which increases to 36.6% when the additional 10% tariff is included, according to IHKIB. At the moment, this puts Turkey at a tariff disadvantage compared to Bangladesh, but at an advantage over China, but these are always in flux.
Turkey exported $792 million worth of textiles and raw materials to the U.S. in 2025, according to the Türkiye Exporters Assembly (TİM). Öksüz called a free trade agreement (FTA) with the U.S., or at least a sector‑specific preferential trade agreement (PTA) “a necessity,” adding it could help raise that export number to $1.32 billion within two years.
“We are not the biggest producers for the U.S., but the U.S market is something Turkey wants to take a bigger part of,” said a representative at IHKIB. “We want to reintroduce ourselves.”
More mills and sourcing agents also have permanent showrooms in the United States to better and more strategically partner with brands on sourcing and design.
Stella Sourcing, which has a showroom in New York’s Garment District, represents 8 different Turkish mills, selling “mid-tier tailored to novelty to jacquard fabrics” to brands and retailers like Express and Theory.
”Turkey’s value added is our innovation and creativity,’ said Aydin Cubukcu, owner and CEO, Stella Sourcing. “We are not the cheapest, but we are also not the most expensive, so we sell on our strong points. And we’ve been leaders in sustainability, leaders in developing qualities with new yarns. And when traceability became a big factor, we were quick to adopt such practices, too.”
Sustainability: A ‘Mandatory’ Competitive Advantage
Over the past 20 years, Turkey has pivoted from a manufacturing hub into a destination for green investment. Turkey ranks 7th in Europe for both solar and wind capacity, and 4th globally in geothermal capacity, according to Invest in Turkiye. This transition has accelerated in recent years through key reforms, including a Climate Law passed in 2025 that aligns with the country’s 2053 net zero target.
Turkey will also host the 31st UN Climate Change Conference (COP31) this November, underscoring the country’s sustainability commitment. Under Trade Minister Ömer Bolat, Turkey introduced Green Deal adaptation support programs—particularly the “Responsible Program”—that cover up to 50% of consultancy costs for firms embarking on sustainability and EU-aligned green transformation projects.
“The European Union is making sustainable textiles criteria mandatory by 2030. Just being fast is no longer enough,” said Karaarslan, adding that as Taypa’s 50-million-unit production facility marches toward 2030 targets, it cut carbon emissions by 48% and began sourcing a substantial share of its energy from renewables. “Given the EU’s border carbon tax regulations, companies that fail to make this investment are unlikely to find a place in the European market after 2026,” he said.
Sustainability might come at a premium, but it puts Turkish manufacturers in a no-choice situation to stay in the game—a conundrum for SMEs that find accessing capital increasingly challenging in Turkey’s high interest rate environment.
“While non-EU competitors might avoid these costs, they are increasingly finding themselves locked out of premium European markets that require strict ESG reporting,” said Melody Malek, business development manager of Egedeniz Textile, a vertically integrated “farm to garment’ operation that handles everything from organic farming to ginning to spinning, knitting and final garment manufacturing.
“For Turkish suppliers, being ‘EU-aligned’ isn’t just a badge; it’s a security of supply for brands that cannot afford the reputational or legal risk of non-compliance” she said, adding that traceability is a Turkish trademark. “Being based in Izmir, we have a direct line to our farmers, which allows us to guarantee the integrity of our certifications and origin of organic cotton in a way that’s difficult to achieve when sourcing from multiple, opaque global markets.”
Ultimately, Turkey knows it can never beat lower-cost countries on raw volume or price, but it can scale its value-added advantage by becoming the global benchmark for high-integrity, traceable organic fiber.
“The era of Turkey as a high-volume, low-cost ‘factory floor’ is ending,” said Malek. “Our future lies in focusing on circularity, regenerative agriculture and rapid, high-quality production. We aren’t just selling t-shirts anymore; we are selling a transparent, ethical and low-impact supply chain.”
Turkey’s apparel sector is accelerating recycling and innovation. In 2025, Kipaş Textiles partnered with Meltem Kimya to scale textile-to-textile recycling through fibR-e, converting polyester waste into new fibers at a 200-ton daily capacity—timely as rising oil prices are driving up virgin polyester costs. Denim mill Bossa, which produces 42 million meters of denim fabric a year, now produces roughly half its fabrics with at least 20% recycled content, while ISKO has introduced stretch denim without elastane to improve recyclability.
To stay competitive, companies are also investing in custom AI-driven automation. “Turkish companies need to build their own high-tech solutions—conduct R&D to implement AI-supported robot technologies tailored to their own specific needs,” said Taypas’s Karaarslan, adding that despite China often having higher labor costs than Turkey, the primary reason China can still offer competitive prices is because manufacturers there have developed tech solutions using their own AI and robotics.
Egypt (and Others) Rising
Competition isn’t just coming from Asia, but North Africa/Middle East as well. Egypt has been steadily rising as a manufacturing hub, with apparel manufacturers in Qualified Industrial Zones (QIZs) receiving duty-free access to the United States.
And as Egypt’s growth has cut into Turkey’s market share, some Turkish manufacturers have expanded operations there. Turkey’s Eroglu Moda Tekstil, for example, recently agreed to invest $5.6 million in a new ready-made garment factory in the West Qantara Industrial Zone, with plans to export 95% of its annual output to international markets.
Taypa (Tay Group) is offsetting cost increases in Turkey through “massive integrated facilities” such as T&C Garments in Egypt and TAYAL SPA in Algeria,” said Karaarslan. “Egypt has become the primary line of defense against price pressure, particularly due to duty-free access to the U.S. market and low labor costs.” Eurotay, Tay Group’s Serbia facility, offers “a logistical advantage even faster than Turkey, forming the European pillar of a speed-focused flexible production model,” he said.
This expansion trend is more pronounced in garment production than textiles, where it is easier to relocate sewing machines than capital-intensive processes such as spinning, weaving and knitting, which require significantly heavier machinery and infrastructure.
“My machines are 100 meters long and 50 tons; we’re not moving them anywhere,” laughed Besim Ozek, director of strategy and business development at Bossa. “In garment production, the buildings are the most expensive part.” Of the fabric he creates for Inditex, he sends about 20% to Turkish manufacturers to be turned into garments, while the rest might get fabricated in Egypt, Morocco, Bangladesh or elsewhere. “Last year overall, I exported more than $45 million [of fabric] to Morocco, Tunisia and Egypt. The Mediterranean area is going to be a very good solution for all the brands which are looking for a fast solution.”
