US tariffs may give India a boost in textile exports: SBI
2025-07-15 11:29:38
India may gain share in Bangladesh, Cambodia and Indonesia's textile exports amid US tariffs: SBI
A report by the State Bank of India suggests that India's apparel exports to the US may increase. This is due to tariff tensions on other Asian exporters. India currently has a 6% share. Gaining an additional 5% share could add 0.1% to India's GDP. Opportunities also exist in agricultural commodities and metal scrap.
According to a recent report by the State Bank of India (SBI), India's apparel exports to the US may grow significantly amid the ongoing tariff tensions with major Asian exporters.
The report highlights that India, which currently has a 6 per cent share in the US apparel import market, will benefit if it gains an additional 5 per cent share from competing countries. This potential gain could translate into a 0.1 per cent increase in India's GDP.
The report said that apart from its strong position in the chemicals sector, India has a clear comparative advantage (RCA) in the textiles industry and exports apparel and accessories to the United States.
However, it faces strong competition in this sector from countries such as Bangladesh, Cambodia, Indonesia and Vietnam. Of these, Vietnam currently enjoys a more favourable tariff structure.
For the other countries, Bangladesh, Cambodia and Indonesia, the current US tariff structure puts them at a disadvantage compared to India, the report said.
It said that "India could capture the apparel export share of Bangladesh, Cambodia and Indonesia".
This analysis is supported by US import data for 2024. "Apparel and accessories" is prominent among the top five items imported by the US from Bangladesh, Cambodia and Indonesia, with Bangladesh contributing 88.2 per cent of its US exports, Cambodia 30.8 per cent and Indonesia 15.3 per cent.
These countries may now face higher tariffs from the US, opening up opportunities for India to expand its presence.
Apart from apparel, the SBI report identifies further export growth opportunities for India in other sectors, especially to countries impacted by US tariff changes.
These include agricultural products, livestock and its products, waste and scrap, especially metal scrap, and various processed animal and plant products.
The report concludes that India should actively leverage this trade shift and strengthen its export presence, especially in categories where it has a comparative advantage.
By taking advantage of emerging opportunities amid changing global trade dynamics, India can not only boost its exports but also drive incremental growth in its economy.
