The textile industry hopes that a zero-for-zero trade agreement with the US will increase exports by $6 billion in three years.
India is the third-largest supplier of textile and apparel products to the US after China and Vietnam. The US contributed to 28.5 per cent of India’s total textile and apparel exports between January and November 2024. In FY24, India exported $10.8 billion worth goods to the country, while the imports from the US were just $0.41 billion.
While US imports from China have declined at a CAGR of 9.4 per cent over the last five years, imports from India have grown at a CAGR of 9.1 per cent, highlighting a window of opportunity for India to strengthen its position in the US market.
However, the recent trade tensions saw US firms partially moving away from China and this has benefited Vietnam and Bangladesh the most, as their share increased by 7.8 per cent and 3 per cent respectively. Both Vietnam and Bangladesh are part of preferential trade agreements with the US for textiles and enjoy duty concessions.
The Confederation of Indian Textile Industries finds that India’s textile and apparel exports to the US can surge to $16 billion within the next three years by adding $6 billion in revenues.
“For this, India should explore a zero-for-zero trade agreement with the US for textile and apparel products with necessary safeguards for sensitive products,” it said. A zero-duty structure would create a level playing field for Indian exporters against Vietnam and Bangladesh.
As India remains dependent on cotton imports from the US, a duty-free access mechanism with quota safeguards could ensure a balanced trade approach, it said.