US tariffs are likely to severely impact one-fourth of India’s textile exports in the next six months, according to experts, even as traders grapple with order cancellations in their biggest export market.
“We are looking at a hit of at least 20-25% for the next six months, if I am considering some amount of re-orientation to be done because, otherwise, the figure is 28% of exports—largely apparel and made-ups,” said Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry.
In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council’s Chairman Sudhir Sekhri said that the US tariffs will severely impact the competitiveness of Indian products in the American market, hurting both exporters and consumers.
“Our industry is already experiencing the effects of the tariff hike, with potential losses and order cancellations. We are exploring alternate markets and strategies to mitigate the impact…,” Sekhri said in the letter. “We are also in active discussions with the Ministry of Textiles and Ministry of Commerce & Industry. In our meetings with the ministers of both the ministries, we have been assured of their best possible support.”
US President Donald Trump’s additional 25% tariff on Indian exports to the United States took effect on Wednesday, raising duty on some shipments to as much as 50%—the highest globally and on a par with Brazil.
India’s exports of textiles, gems and jewellery, footwear, sporting goods, furniture, and chemicals, are likely to take the biggest hit, threatening thousands of small exporters and jobs.
Some Respite
On Thursday, India extended duty-free import of cotton by three months till 31 December to support textile exporters. On 18 August, the Finance Ministry had allowed duty exemption on cotton imports until 30 September.
“We are very relieved because the earlier exemption was not benefiting new orders that can be placed for cotton as it takes a minimum 45-50 days to be shipped,” CITI’s Chatterjee said. “So, now this relatively longer widow will benefit the new orders.”
“Prior to these exemptions the difference between the domestic cotton price and the international bench-mark was 10-15%, that will be addressed.”
In 2024-25, the overall size of India’s textile and apparel sector is estimated at $179 billion, comprising a domestic market of $142 billion and exports worth $37 billion.
