Indian Textile Sector Faces 25% Export Hit As Trump’s Tariffs Trigger Order Cancellations

However, the extension of duty-free import of cotton by three more months till December 31 is expected to bring some much-needed relief to the domestic textile industry.

In 2024-25, the overall size of the textile and apparel sector is estimated at $179 billion, comprising a domestic market of $142 billion and exports worth $37 billion. 

Source : Freepik

As the 50 per cent tariffs imposed by the US come into effect, close to one-fourth of India's textile exports may be severely impacted in the next six months, with America being the largest export market for the country's apparel industry and exporters grappling with order cancellations, experts said on Thursday.

However, the extension of duty-free import of cotton by three more months till December 31 is expected to bring some much-needed relief to the domestic textile industry, as it looks to mitigate the impact of the steep tariffs by re-orienting its export strategy and exploring alternate destinations other than the US, by leveraging India's existing free trade agreements (FTAs).

"We are looking at a hit of at least 20-25 per cent for the next six months, if I am considering some amount of re-orientation to be done because otherwise the figure is 28 per cent of exports, largely apparel and made-ups," Confederation of Indian Textile Industry (CITI) Secretary General Chandrima Chatterjee told PTI.

The government on Thursday extended duty-free import of cotton by three more months till December 31 to support textile exporters facing steep 50 per cent tariffs in the US. Earlier, on August 18, the Finance Ministry had allowed duty exemption on cotton imports from August 19 till September 30.

"We are very relieved because the earlier exemption was not benefiting new orders that can be placed for cotton as it takes a minimum 45-50 days to be shipped. So now this relatively longer widow will benefit the new orders," Chatterjee said.

She emphasised that the cotton import duty exemption will impart cost competitiveness by lowering the cost differential.

"Prior to these exemptions the difference between the domestic cotton price and the international bench-mark was 10-15 per cent, that will be addressed," the CITI secretary general said.

In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri said the announcement of 50 per cent reciprocal tariff by the US on Indian imports is a matter of deep concern for the country's textile and apparel industry.

"The United States is one of the largest export destinations, and such a steep tariff will severely impact the competitiveness of Indian products in the American market, hurting both exporters and consumers," Sekhri stated.

However, he assured all support to the government on its stand of protecting the interests of Indian farmers, dairy industry and fishermen.

"Our industry is already experiencing the effects of the tariff hike, with potential losses and order cancellations. We are exploring alternate markets and strategies to mitigate the impact of the US tariffs. We are also in active discussions with the Ministry of Textiles and Ministry of Commerce & Industry. In our meetings with the ministers of both the ministries, we have been assured of their best possible support," Sekhri said.

In 2024-25, the overall size of the textile and apparel sector is estimated at USD 179 billion, comprising a domestic market of USD 142 billion and exports worth USD 37 billion. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)

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