Insights

• Despite the newly imposed 25 per cent US tariff and penalty, India's textile and apparel industry remains confident, citing its quality, scale, and resilience.
• Industry leaders stress the need to remove the 11 per cent duty on US cotton and recommend export incentives.
• The UK FTA and progress in EU negotiations offer alternative opportunities.
• Competition from Vietnam and Indonesia remains a concern.

Despite the announcement of a 25 per cent US tariff and additional penalties, India’s textile and apparel (T&A) industry remains optimistic and confident of maintaining its foothold in the US market under challenging conditions. Industry leaders are banking on India’s unmatched quality, production scale, and reliability to retain market share. The recent free trade agreement (FTA) with the United Kingdom is also expected to help offset any potential losses in the US market. However, the industry has put forward two key suggestions to mitigate tariff pressures.

Sanjay K Jain, chairman of the ICC National Expert Committee on Textiles and managing director of T T Limited, told Fibre2Fashion, “Although a 25 per cent US tariff on Indian exports is not good, it is still manageable. When we compare this rate with the tariffs imposed on the US’ other major textile suppliers—China and Bangladesh, at 30 per cent [55 per cent overall] and 35 per cent respectively—we are in a relatively better position. That said, Indonesia and Vietnam could pose tougher competition, as they will be subjected to lower tariff rates.”

“I do not expect India’s textile and apparel exports to the US to go down as we are still in a better position than China and Bangladesh. US tariffs is just a loss of prospects of lower duty, but we will be at par, and it is nothing to be happy or disappointed about. The recent FTA with the UK will also open another door for Indian exports. India is also negotiating with the Europea Union (EU) for an FTA. The EU is looking to reduce its dependence on Bangladesh and the buyers’ ‘China Plus One’ policy is also favourable for us,” he added.

Jain further suggested removing the 11 per cent import duty on US cotton and incentivising Indian exports to the US by allocating funds from savings on the Russian oil import bill. Removing the duty would enhance the competitiveness of Indian products in the US market, while export incentives could support sector-wide growth.

Rahul Mehta, chief mentor, Clothing Manufacturers Association of India commented, “Whilst the announced levy of 25 per cent does come into effect, it would indeed be a surprising twist to our expectations on the way the trade talks were proceeding. However, having seen the several about turns on the tariff front in the case of other countries, I would not press panic buttons right now. But, if the proposed terms do come into effect, it will make our products 7 to 10 per cent more expensive than some of our competitors, and it will certainly hurt our apparel exports to the US. Fortunately, this set-back has come at the time when we have just signed an FTA with UK and are proceeding rapidly with an FTA with EU. So yes, it is tough times, but not beyond our ability to face.”

Dr. Mukesh Kansal, chairman, CTA Apparels, said, “US President Donald Trump’s decision to impose a 25 per cent tariff along with penalties may challenge India’s price advantage and shift competitiveness toward nations with preferential trade agreements. However, India’s true strength is not limited to cost—it lies in our unmatched quality, scale, and reliability. While this move may create short-term margin pressures, it will ultimately compel Indian manufacturers to innovate, diversify, and solidify their leadership in the global marketplace.”