Textile and apparel firms push for zero-duty trade with the US

The Confederation of Indian Textile Industry (CITI) views this development as an opportunity to expand exports to the US.

With the United States set to implement reciprocal tariffs on imports from its trade partners starting April 2, India’s textile and apparel industry is advocating for a “zero-for-zero” tariff agreement with the US. This proposal aims to eliminate duties on most products while ensuring protections for strategic items.

The Confederation of Indian Textile Industry (CITI) views this development as an opportunity to expand exports to the US. The industry has already communicated its proposal for duty-free textile and apparel trade to the Indian government during recent stakeholder discussions.

Currently, the US imposes tariffs ranging from 2.5-7.4 per cent on Indian apparel, while India’s import duties on similar products vary between 5 and 12 per cent, depending on price. A reduction in these tariffs could significantly boost India’s textile and apparel exports to the US, with projections estimating an increase from $10.8 billion in 2024 to $16 billion within three years.

India ranks as the third-largest textile and apparel supplier to the US, accounting for 10.8 per cent of total imports worth $118.4 billion. China leads with a 25.6 per cent share, though its exports to the US have declined at a compound annual growth rate (CAGR) of 9.4 per cent over the past five years. In contrast, India’s exports to the US have grown at a CAGR of 9.1 per cent during the same period.

In 2024, India exported $10.8 billion worth of textiles and apparel to the US, while US exports to India stood at just $0.41 billion, primarily consisting of fibre products such as cotton. Given recent crop failures in India, a tariff agreement could provide a strategic advantage by securing cotton imports from the US at competitive rates.

The industry also emphasises the importance of focusing on manmade fibres, where India is emerging as a key supplier. The Apparel Export Promotion Council (AEPC) has identified products with exports exceeding $100 million, as well as those covered under the Production Linked Incentive (PLI) scheme, as critical for negotiations.

In 2024, the US imported $79.26 billion worth of apparel, with China, Vietnam, Bangladesh, and India accounting for 21, 19, 9.3, and 5.9 per cent of the market, respectively.

News source: Financial Express