US Tariffs and Their Impact
On August 27, the United States imposed a punitive 50% import tariff on Indian apparel and textiles, creating a severe setback for the sector. With over $48 billion in trade exposed and $10.3 billion of exports to the US in the last financial year, Indian textile exporters are among the worst affected by this policy change. The new tariffs have essentially priced Indian apparel out of the US market, forcing a rapid re-evaluation of export strategies.
India's Targeted Outreach: 40 New Markets
In response, India is launching campaigns to tap into 40 major markets, including the UK, Japan, and South Korea. Together, these countries account for $590 billion in textile and apparel imports, while India currently holds only 5–6% of that share, highlighting significant headroom for growth. The outreach aims to position Indian suppliers as reliable sources of quality, sustainable, and innovative textile products in both traditional and emerging destinations.
Strategy for Market Expansion
Led by Export Promotion Councils (EPCs) and Indian Missions abroad, the government’s plan includes:
Helping exporters leverage Free Trade Agreements (FTAs), meet sustainability norms, and obtain certifications.
These steps intend to link key clusters like Surat, Panipat, Tirupur, and Bhadohi to global buyers and demand.
Challenges and Opportunities
The industry faces steep challenges in diversifying markets quickly, as regaining lost share is difficult after buyers switch to other cost-competitive locations. However, trade deals with the UK and EFTA countries are viewed as crucial opportunities to contain the damage and help Indian exports remain competitive in the absence of US demand.
Size and Structure of the Indian Textile Sector
The Indian textile and apparel industry is valued at about $179 billion for the fiscal year 2024-25, with $37 billion coming from exports alone. Despite the scale, India holds only 4.1% of the global textile import market, which is over $800 billion, ranking sixth worldwide.
Why the US Tariffs Matter
The 50% import tariffs from the United States create a double-layered burden:
Originally, the industry accepted a 25% reciprocal tariff, but the additional 25% penalty has been described by experts as effectively removing Indian exporters from the US market.
Over $48 billion in trade is exposed due to these tariffs, with the US accounting for $10.3 billion in Indian textile and apparel exports in 2024-25
Market Diversification Approach
India’s response is a major outreach campaign in 40 global markets. These markets import $590 billion worth of textiles and apparel products, but Indian exporters currently possess only 5–6% of that potential market share. The outreach involves:
Positioning Indian products as quality, sustainable, and innovative.
Led by Export Promotion Councils and Indian Missions abroad to channel domestic clusters such as Surat, Panipat, Tirupur, and Bhadohi towards international demand.
Focusing outreach efforts on both traditional partners (UK, Japan, South Korea) and emerging countries
Role of Trade Deals and Government Support
Trade negotiations—with the UK and EFTA countries prominently mentioned—are seen as a vital strategy to maintain competitiveness and slow market share loss. Free Trade Agreements (FTAs) will help exporters through:
Guidance on meeting sustainability norms and certifications that are crucial for access to many foreign markets.
Organizing participation in trade shows and exhibitions, helping firms stay visible.
Conclusion
India’s textile and apparel sector is at a crossroads, adopting proactive outreach and government-led strategies to mitigate the impact of US tariffs. By focusing on new markets and leveraging trade agreements, the industry seeks to secure its position and boost exports despite global headwinds
Reviewed by Aparna Decors
on
August 28, 2025
Rating:
