The US tariffs with India’s 26 per cent rate being the lowest among Asian exporters, create a significant scenario for India’s apparel sector. In the near term, US demand may soften as brands work through existing inventories and adopt a ‘wait-and-watch’ approach amid policy uncertainty. However, given the labour-intensive nature of garment manufacturing, Asia will likely retain its dominance as the most cost-efficient production hub in the long run. India is relatively better positioned than peers due to its tariff differential. The PLI l scheme gains even more significance here, boosting supply-side competitiveness through economies of scale and cost-effective manufacturing will be key to converting this advantage into sustained export growth. Meanwhile, the potential EU FTA adds another dimension. As the EU explores India’s growing consumer market and India seeks to diversify trade avenues, a ratified agreement could further strengthen India’s position as a dual-purpose hub—serving both as an export base and a consumption-driven market. The convergence of tariff recalibration, domestic policy push (PLI), and strategic trade alliances (EU FTA) could redefine India’s role in global apparel trade.’
The opinion is presented by Ankit Jaipuria, Co-Founder, ZYOD