Despite gains on Bangladesh and Cambodia, new US tariffs put pressure on Indian textile exporters
This is a mixed bag for Indian textile and apparel exporters, as these exports to the US will be at an advantage compared to production hubs like Bangladesh and Cambodia, where tariffs are high. At the same time, countries like Indonesia and Vietnam could emerge as new competitors for India in this sector.
The US has announced a 25% tariff and additional punitive duty on India from August, while it has already imposed 35% and 36% tariffs on Bangladesh and Cambodia, respectively. However, the US tariff on Indonesia and Vietnam is lower at 19% and 20%, respectively. Till now, the tariff from India to the US was 10%.
Rakesh Mehra, president, Confederation of Indian Textile Industry (CITI), said, "The new tariff rate will put the resolve and resilience of India's textile and apparel exporters to a severe test as we will not get any significant benefit of duty differential compared to many other countries, except Bangladesh, with whom we compete for a large share in the US market."
The US is India's largest market for textile and apparel exports. During January-May 2025, textile and apparel imports by the US from India were worth $4.59 billion, a growth of over 13% compared to the same period last year. China is the largest exporter to the US, followed by Vietnam, India and Bangladesh.
The industry is now hopeful that the tariff issue will be resolved after a bilateral trade deal between India and the US. Sanjay Jain, managing director, TT Industries, said India had targeted a 10-15% growth in its textile exports to the US, which will be impacted due to the new tariffs.
