India’s garment and textile sector, hit hard by steep US import tariffs, has urged the government to announce relief measures in the upcoming Union Budget 2026–27. Industry representatives recently met the Textiles Secretary, seeking both fiscal and non-fiscal support to counter the sharp decline in exports and restore competitiveness.
The sector, which employs over 45 million people and is valued at $174 billion, has seen exports to the US plummet after Washington imposed additional tariffs of 50 per cent in August 2025 — far higher than the 19–20 per cent faced by competitors such as Vietnam and Bangladesh. Between May and September 2025, India’s textile and apparel exports to the US fell 37 per cent to $597 million, with garments alone dropping 44 per cent, according to industry data.
Key demands include reinstating the Interest Equalisation Scheme on export credit for MSMEs, reintroducing the 15 per cent concessional tax rate for new manufacturing units under Section 115BAB, and allowing 100 per cent accelerated depreciation over two years on eligible capital assets to improve liquidity and investment.
The industry has also sought rationalisation of the IGCR (Import of Goods at Concessional Rates of Duty) Rules, urging that duty-free import benefits for trims and accessories be extended to intermediate suppliers and deemed exporters, along with a permissible wastage allowance of up to 10 per cent.
Industry bodies said these measures are critical to safeguard jobs, revive exports, and help Indian manufacturers compete globally amid rising input costs and a tightening international trade environment.
