Trump tariffs threaten margins on India’s $10-billion textile exports

In FY24, the US imported textiles worth $10.05 billion from India, comprising 28 per cent of India’s total textile and apparel exports.

India’s textile and apparel sector faces renewed pressure as US President Donald Trump has imposed a 25 per cent tariff on Indian goods, catching the industry off guard. Although India’s tariff is lower than China’s 30 per cent and Bangladesh’s 35 per cent, these countries can afford deeper price cuts, making it harder for Indian exporters to stay competitive in the US—their largest export market.

In FY24, the US imported textiles worth $10.05 billion from India, comprising 28 per cent of India’s total textile and apparel exports. Apparel accounts for the largest share, followed by home textiles and made-ups such as carpets, towels, and upholstery. Vietnam, with a lower tariff of 20 per cent, now enjoys a clear advantage over India and other competitors.

The US accounts for 33 per cent of India’s garment exports, with China, Vietnam, Bangladesh, India, and Sri Lanka holding respective market shares of 21, 19, 9, 6, and 3 per cent. According to Sudhir Sekhri, Chairman, AEPC Chairman, Indian apparel exports to the US stood at $5.1 billion in FY25 and are likely to slow until an interim bilateral trade agreement is finalised, expected by late 2025. While acknowledging the blow, Sekhri remains cautiously optimistic, calling the “penalty” a grey area that New Delhi may soon negotiate.

News source: Money Control