Indian textile exporters get a boost from Trump's tariffs
By yash chouhan 2025-04-03 12:31:09
Trump's tariffs will give Indian textile exporters an edge over competitors
President Donald Trump's decision to impose tariffs on all imports into the United States (US) will benefit India's textile industry, as its competitors such as Vietnam, Bangladesh and China will face higher tariffs, experts say.
If the trade talks result in zero duty on cotton imports, it could be even more beneficial. A key factor for Indian textile exports will be buyer sentiments in the US. "In the past, India, Bangladesh and Vietnam faced similar tariff structures for cotton apparel exports. However, with the recent changes, India now holds a tariff advantage over these competing countries in comparative terms, which could increase its competitiveness in the US market for apparel exports," said Prabhu Dhamodharan, convener of the Coimbatore-based Indian Texpreneurs Federation.
As per Trump's announcement, Vietnam's textile exports will be subject to a 46 per cent tariff, Bangladesh 37 per cent and China 54 per cent.
According to US data on textile shipments and bill of lading data for 2024, China's share in its textile imports was about 30 percent, or $36 billion. Vietnam was second with textile imports of $15.5 billion (13 percent share), and India was at $9.7 billion (8 percent share). Bangladesh used to have a large share in US textile imports, but its share fell by 6 percent to $7.49 billion in 2024 due to political turmoil. Total textile imports to the US in 2024 were $107.72 billion. Imports of clothing, which is the bulk of textile imports to the US, increased by 2 percent from $77 billion in 2023 to $79 billion in 2024.
"If India reduces the import duty on cotton from 11 per cent to 0 per cent, it will benefit both countries. Now the ball is in India's court," said K Venkatachalam, chief advisor, Tamil Nadu Spinning Mills Association.
India's Apparel Export Promotion Council (AEPC) has already approached the textiles ministry seeking a 'zero for zero' duty policy on textiles and apparel. It believes that the government should reduce the duty on textile products to zero per cent, which will prompt the US to apply the same duty rate on Indian exports.
"India is well positioned to increase its market share in the US because of this tariff hike. The ongoing trade talks can further strengthen India's position - especially if India offers zero-duty import of cotton in exchange for sector-specific benefits in apparel exports. This move could prove to be a game changer for the industry," Dhamodharan said.
Another advantage for India is that the textile sector contributes only 2 per cent to its GDP, compared to 11 per cent and 15 per cent for competitors Bangladesh and Vietnam.
"It looks negative for the whole world, and short-term buying will slow down as they will eat up their pipeline inventory in the hope of relief as countries renegotiate tariffs with the US. However, if all this continues, the US will have to buy apparel, and compared to all major global textile suppliers (except the EU), we will be cheaper, and hence India will be the preferred destination for textile and apparel sourcing," said Sanjay Kumar Jain, managing director of textile producer TT Ltd. According to an industry expert, companies such as Trident, Welspun India, Arvind, KPR Mill, Vardhman, Page Industries, Raymond and Alok Industries will benefit as their revenue share from the US market is between 20 per cent and 60 per cent.
