Fabric of the industry frays: What Trump’s tariffs really mean for India’s textile sector
By yash chouhan 2025-04-14 17:56:52
Trump's Tariffs: Impact on India's Textile Industry
The textile and apparel industry is a significant contributor to India’s economy, contributing 2.3% to the country’s gross domestic product (GDP), 13% to industrial production and 12% to exports. The US and the European Union (EU) are the major destinations for India’s textile and apparel exports, accounting for a 47% share in India’s exports, as per a PIB release.
An in-depth look at the numbers tells the facts on the ground. India exported textile items worth $34.4 billion in 2023-24, with apparel comprising 42% of the export basket, followed by raw materials/semi-finished materials at 34% and finished non-apparel goods at 30%. In fact, the US is the largest buyer of India’s textiles, accounting for nearly 28% or $10 billion.
In this context, what do US President Donald Trump’s reciprocal tariffs of 26% imply for the textile sector, even though he announced a 90-day pause on Wednesday (April 9) for all countries except China?
If the tariffs continue even after the break, what challenges or opportunities might arise for a sector that is the second-largest employment generator after agriculture?
Sanket Desai, Indirect Tax Partner-Consumer Products and Retail, EY India, hints at a potential silver lining amidst the ongoing chaos. “The newly imposed US tariffs are expected to reshape the global textile trade landscape, potentially positioning India more favourably compared to its competitors. On the positive side, even higher tariffs on nations competing with India provide a competitive edge, potentially presenting an opportunity to increase its market share in the US. Thus, it may be a ‘blessing in disguise’ due to the relative tariff situation,” he states.
Trump slapped higher tariffs on competitor countries in the segment, with Vietnam staring at a 46% tariff, Bangladesh 37%, China 34%, Cambodia 49%, and Pakistan 29%.
Kumar Duraiswamy, Joint Secretary, Tiruppur Exporters’ Association (TEA), affirms that the scenario provides an edge for expanding business to the US. Making a reference to the man-made fibre (MMF) segment, he spoke of how the tariff enforced on Jordan holds us in good stead. “A lot of sportswear and handmade fibre goods were being exported from Jordan, which meant sourcing from China and Korea. But now tariffs have come upon them, too. At a time when India is eyeing MMF production in a big way, this presents a significant advantage for the textile industry,” he remarks.
