All eyes are on a high-stakes trade deal between India and the United States that involves thousands of crores in textile exports, with far-reaching implications in the labour industry.

At the centre of the negotiations is a 26% tariff that Indian textile firms currently face while exporting to the US, a market that makes up 28% of India’s textile exports. If India manages to bring this down to 10%, it could be a game-changer for companies like Welspun Living, Trident, and others with large exposure to the US market.

India’s textiles sector has traditionally competed with China and Pakistan in home textiles, with Vietnam and Bangladesh being competition for garments.

Meanwhile, regional competition is intensifying. Vietnam, a key rival in garments and apparel, has already secured a steep cut in tariffs from 46% to 20% under a trade agreement with the US.

That shift has raised concerns that India could lose market share unless it moves swiftly to negotiate a more favourable deal.

“If US tariffs on India are lowered to 10% from 26%, this could give a tariff advantage in textiles, electronics, toys, and footwear,” said Sonal Varma, managing director and chief economist (India and Asia ex-Japan), Nomura.

This reduction could serve as a tailwind for India’s broader ambition to integrate more deeply into global value chains, particularly in competition with countries like Bangladesh, Pakistan, and Vietnam.

"Tariffs relative to competing countries will be more critical," stated a Jefferies report.

The pressure is especially high for firms heavily dependent on US exports.

Company-level disclosures indicate that Himatsingka Seide earns a massive 83% of its revenue from the US. While, Golakdas Exports derives 77%, or around Rs 3,000 crore from the US market.

Welspun Living sees 63% of revenue from the US, while Trident earns 39%.

Even companies like Alok Industries and KPR Mills have significant US exposure, at 45% and 21%, respectively.

Despite near-term uncertainty, long-term projections for Indian textiles remain strong. India has already crossed $34 billion in textile exports and aims to reach $100 billion by 2030.

With other countries securing concessions and deadlines fast approaching, the coming weeks could prove pivotal in determining whether Indian textile exporters gain ground—or fall behind.