The textile industry is one of the pillars of Turkey's national economy. In earlier years, leveraging its geographical proximity to the European Union and a complete industrial chain ranging from raw materials to finished garments, Turkey competed fiercely with China's textile industry. Currently, Turkey is the world's 6th largest producer and exporter of textiles and apparel, and the 3rd largest source of imports for the EU. However, since last year, affected by weak external demand, rising costs, and intensified competition from Asia, the Turkish textile industry has been experiencing its most severe downturn in 20 years. In 2025 alone, over 300 enterprises filed for bankruptcy, and more than 300,000 jobs were lost.

   1. Orders Shifting to Lower-Cost Regions   

       According to Turkish media reports, in major textile hubs such as Istanbul, Denizli, Bursa, Gaziantep, and Kahramanmaraş, many factories have either halted production or reduced their operating rates to 30-40% of normal levels.

       In Istanbul, once-bustling textile trade districts like Merter, Osmanbey, and Laleli have seen a notable decline in activity. These areas previously served buyers from countries such as Russia, Ukraine, Kazakhstan, and Georgia, but many showrooms are now closed.

       Numerous merchants have stated that reduced orders, rising costs, and limited access to financing are their primary difficulties. Changes in foreign purchasing behavior—marked by a significant decrease in cash transactions—coupled with perceptions of regional security and weaker economic conditions in buyer countries, have further dampened buyer willingness to visit.

       Industry insiders point out that intensified competition from Asian countries is a major source of pressure. Production countries such as Bangladesh and Vietnam, benefiting from lower labor and energy costs, are demonstrating stronger price competitiveness in the international market.

       The head of the Turkish Exporters' Assembly noted that Turkish apparel has traditionally commanded higher prices than Chinese or Indian goods, with superior quality justifying the premium. However, that model no longer holds. "When our prices were 15-20% higher, European customers chose us. Now the price difference has reached 50%," he said.

       Foreign orders are shifting toward Asia. China is already the EU's largest supplier of textiles and apparel. In 2025, China's exports of textiles and apparel to the EU grew by 1.8% year-on-year. For major products such as knitted and woven garments, export value increased by 3.1%, driven by a 6.2% rise in export volume, even as average unit prices fell by 2.9%.

   2. The Fall of Two Turkish Textile Giants   

       The difficulties facing Turkey's textile industry are not limited to small and medium-sized enterprises. Two manufacturers that had long collaborated with global giants, Nazırme Kumaş and Fame Tekstil, have both been declared bankrupt by courts.

       Nazırme Kumaş had specialized in knitted fabric production since 1996, operating 45 advanced knitting machines with a monthly production capacity of up to 800,000 kilograms. Its founding team, educated in Germany, deeply understood the stringent European market requirements for functionality, comfort, and environmental standards. Its product range included high-stretch sportswear fabrics, moisture-wicking base-layer fabrics, and recycled polyester eco-friendly knitted fabrics. Although end consumers never saw its brand, its fabrics quietly appeared in the supply chains of numerous European sportswear, lingerie, and casual wear brands. According to the Turkish Textile Exporters' Association, the company's knitted fabric exports reached $120 million in 2019, ranking among the top five nationwide.

       Fame Tekstil, operating since 1992, consistently produced 300,000 garments per month, serving as an OEM for international fast-fashion brands such as Zara and H&M, as well as high-end local clients. Its core competitive strength lay in its "small order, quick response" capability: even for orders of just a few thousand pieces, it could complete the entire process from sampling to shipment within 3–4 weeks. This model thrived during the fast-fashion boom of the 2010s. More importantly, Fame Tekstil was not a simple OEM contractor but was deeply involved in design adaptation and process optimization, often invited by brands to participate early in next-season product development. This "collaborative manufacturing" relationship helped it stand out in fierce competition, making it one of Turkey's top 50 apparel exporters to Europe.

       After the outbreak of the Russia-Ukraine conflict in 2022, the external environment on which the Turkish textile industry depended deteriorated sharply. The systemic crisis—driven by surging costs, shrinking demand, financial tightening, and policy disarray—ultimately led to a complete rupture of its cash flow chain.

       Recognizing the urgency, the Turkish government launched the "Textile Industry 2030 Strategy" in 2025, explicitly supporting automation, circular economy initiatives, and brand internationalization, with plans to invest 2 billion Turkish lira in industrial upgrading.

       Offshoring may be another solution. Some top Turkish brands have already moved part of their production to Egypt. This presents both an opportunity and a lesson for Chinese textile export enterprises.