New opportunity for textile industry from India-US deal
By yash chouhan 2026-02-09 12:38:10
India-US trade deal unlocks $118 billion American textile market
As India and the US announce that they have reached an interim trade framework, it opens up a $118 billion US global imports market of textiles, apparels and made-ups, a “major opportunity” for the country’s textile industry, as per the government.
With the US being India’s largest export destination of around $ 10.5 billion exports, comprising around 70 per cent apparel and 15 per cent made-ups, the Textiles Ministry has welcomed the landmark agreement between both the nations as a major catalyst enhancing textile trade relations.
The textile industry said the deal was a major economic game changer for the sector and was expected to play a pivotal role in India achieving its intended target of $100 billion exports in 2030. It is also expected to provide the requisite momentum, with US to contribute to more than 1/5th of this target.
A key advantage of the deal lies in the 18 per cent reciprocal tariffs on all the textile products including apparel and made-up. This will not only remove the disadvantage that Indian exporters had, but would place them in a better position than most competitors who face higher reciprocal tariffs like Bangladesh (20 per cent), China (30 per cent), Pakistan (19 per cent) and Vietnam (20 per cent).
This shift would significantly alter sourcing methods and drive customers to re-evaluate supply chains in favour of India.
Meanwhile, the Confederation of Indian Textiles Industry (CII) estimated that India exported almost $11 billion worth of textiles and apparel to the United States in FY25. India’s biggest export destination for clothing and textiles is the US, which also contributes significantly to industry earnings. About 28–33 per cent of India’s total exports of textiles and clothing go to the US.
Yet, with about 9.4 per cent of the US import market, it ranks as the fourth-largest supplier of clothing and textiles to the US. In fact, 33 per cent of India’s exports of ready-made clothing, 48 per cent of its home textile exports, and 59 per cent of its carpet exports are shipped to the US. India’s competitive position was thus undermined by the US’s 50 per cent tariff on its goods.
“The India–US Interim Trade framework is a timely and positive step towards the $500 billion trade ambition. By addressing tariffs, non-tariff barriers and supply chain resilience, it creates a more predictable and enabling environment for businesses and two-way investments across manufacturing, technology, energy and services,” Chandrajit Banerjee, Director General, CII, said.
The agreement would also enable the industry to be cost-competitive and diversify their risks by sourcing intermediates for the textiles sector from the US. This would facilitate manufacturing of value-added textiles in the country and diversify our production and exports. The deal would generate additional employment and encourage investments by US entities.
