Free US imports by Asian peers will hit Indian cotton, yarn, textiles and apparel exports
2025-04-12 11:04:58
Indian Yarn & Textile Exports at Risk from Asian Rivals
Vietnam is facing 46 per cent reciprocal tariffs, Bangladesh 37 per cent, and Cambodia 49 per cent, though they have received a breather for 90 days with a basic tariff of 10 per cent.
Chennai : Bangladesh, Vietnam and Cambodia are in the process of either removing fully or charging minimal tariffs on US imports as part of their trade negotiations. This will make not just Indian textile and apparel exports to the US less competitive but shrink our cotton and yarn exports to these countries as well. Vietnam is facing 46 per cent reciprocal tariffs, Bangladesh 37 per cent, and Cambodia 49 per cent, though they have received a breather for 90 days with a basic tariff of 10 per cent.
In order to offset the impact, Bangladesh has offered to increase US agricultural imports, including cotton. Similarly, Cambodia has announced a reduction in tariffs on 19 US product categories from the maximum 35 per cent to an applied 5-per cent rate. Vietnam too is ready to drop its duties on US imports. This will see the US exporting more cotton to these countries. The US is the third largest producer of cotton after China and India. According to Chandrima Chatterjee, secretary general of Confederation of Indian Textile Industry, import parity pricing of US cotton will be lower compared to India as India. In the recent past, Indian cotton has remained pricier compared to international cotton. Further, these countries will be under pressure to import more cotton from the US to ward off tariffs.
India exports over $2 billion cotton and yarn to Bangladesh and a considerable portion of this is facing potential trade displacement. Similarly, the export of cotton and yarn to Vietnam and Cambodia also are sizeable. Further, in the absence of reciprocal tariffs, exports of apparels from these countries will become more competitive compared to Indian exports. Shrinkage of cotton and yarn exports along with apparels and textiles will be a double whammy for India. In 2024, India exported textile products worth $10.5 bn to the US. This mainly includes, apparels, home textiles and other textile products. India also imports cotton from the US and of the imports, Extra Long Staple cotton is not produced in India in sufficient quantities. The textile industry hopes that the Indian government too will negotiate with the US for a better deal.
