The global trade landscape is shifting, and the Indian textile and apparel (T&A) industry finds itself at a strategic inflection point. Years of pandemic-induced stagnation, geopolitical tensions, and China’s continued dominance had stifled India’s growth in this sector. Now, a fresh wave of tariff reforms in the US is offering a new lease of life to Indian exporters.
The US administration has decided to impose higher tariffs on several Asian textile powerhouses. Vietnam, Bangladesh, Cambodia, and Pakistan are now facing import duties ranging from 29 per cent to as high as 49 per cent. For China, the range is even steeper—between 54 per cent and 245 per cent depending on the product category. In comparison, India faces a relatively moderate 26 per cent tariff on apparel, making it more appealing in the eyes of American buyers. Though there is a 90-day pause on US tariff implementation for all countries (except China), effective until July 9, 2025, the development can provide a big opportunity for India.
The external environment is also turning in India’s favour. Bangladesh is dealing with political instability, leading to operational disruptions and factory closures. China is facing rising production costs and supply chain uncertainty due to geopolitical factors. Industry estimates indicate that nearly 15 per cent of US-bound textile orders have recently moved away from China. Global brands such as Walmart, Marks & Spencer, and Primark have increased their sourcing from India. In fact, Tiruppur, which accounts for 90 per cent of India’s cotton knitwear exports and 55 per cent of overall knitwear exports, clocked in Rs 400 billion in export revenue in FY25, which was its highest-ever export revenue.
Despite these gains, the Indian textile industry faces significant structural challenges. Synthetic fibres and man-made materials now dominate 70 per cent of global textile trade. India’s overdependence on cotton, high domestic prices, and limited synthetic fibre production capacity limit its competitiveness in fast fashion categories. In contrast, countries like Vietnam have aggressively invested in MMF capacities, enabling them to meet evolving global demand more effectively.
Additionally, segments like home textiles and made-ups—which contribute $10 billion to India’s annual textile exports—are under pressure. With 60 per cent of their orders reliant on the US market, this category has reportedly seen nearly $2 billion worth of exports being put on hold or renegotiation table. Apparel exports, India’s largest at $16 billion, are also grappling with the new tariff structure, especially in low-margin categories such as basic knitwear. Furthermore, rising costs may push US consumers to cut back on purchases, reducing demand even for competitively priced Indian products.
Amid these complexities lies a critical opportunity. The tariff shifts offer India a chance to strengthen its position in global supply chains—if it can move swiftly. Investing in synthetic fibre infrastructure, upgrading textile machinery, and focusing on R&D will be the key to building long-term resilience. India has a window to reposition itself as a global textile leader. The coming months will determine whether the industry capitalises on this moment—or lets it slip away once again.