Indian garments, textiles, yarn may see demand boost as US cotton prices dip amid China’s retaliatory tariffs
By yash chouhan 2025-03-06 18:02:27
As US cotton prices decline due to China's retaliatory tariffs, demand for Indian clothing, textiles, and yarn may increase.
The US cotton market’s decline as a result of China’s retaliatory tariffs may increase demand for Indian clothing, yarn, and textile exports.
The industry anticipates that India will gain market share in the US and Europe as a result of the retaliatory tariff, which will decrease the competitiveness of Chinese textile exports and boost the availability of superior quality US cotton at lower prices.
After China applied retaliatory tariffs of 10–15 per cent, US cotton prices dropped to their lowest levels in four years. With a 31 per cent global market share for its less expensive cotton, India leads the world in the export of cotton yarn.
Trade estimates indicate that a decline in domestic production caused India’s imports of cotton to rise by more than 62 per cent in 2024–25 compared to the previous year.
The majority of the cotton that India imports from the US falls into the extra-long staple (ELS) category. According to Siddhartha Rajagopal, executive director of the Cotton Textile Export Promotion Council (Texprocil), Indian textile manufacturers may find it financially feasible to increase their imports of US cotton if US cotton prices fall as a result of decreased demand from China.
Despite being largely self-sufficient in cotton production, India imports certain ELS cotton and clean and contamination-free cotton to satisfy buyer or quality standards. India purchased US $ 570 million worth of raw cotton from throughout the world between April 2023 and March 2024, with US $ 221 million coming from the US, accounting for 38.7 per cent of the total imports, according to industry data.
The US, with its better Extra Long Staple Cotton (ELS), would also try to diversify its cotton exports and turn towards India as a major trading partner because of the limited access in the Chinese market, Rajagopal stated.
The tariffs are expected to affect Chinese textile products’ ability to compete in global markets, giving Indian exporters a chance to increase their market share, particularly in countries like the US and the EU.
The demand for Indian cotton yarn, textiles, and clothing may increase as a result of this change, boosting export levels. According to Rajagopal, exporters would have more alternatives for pricing as the market for Indian cotton products expands, which will boost their profit margins.
