Trump’s Tariffs Give Indian Textile Industry a Competitive Edge

President Donald Trump’s decision to impose tariffs on all imports to the United States (US) has created new opportunities for India’s textile industry. As competing countries like Vietnam, Bangladesh, and China face higher tariffs, Indian textile exporters could gain an advantage in the US market.

India’s Competitive Advantage

Previously, India, Bangladesh, and Vietnam faced similar tariff rates for cotton apparel exports. However, the new policy has changed the landscape. With Vietnam’s textile exports now subject to a 46% tariff, Bangladesh at 37%, and China at 54%, India may have a better chance to compete in the US market.

“The recent tariff adjustments give India an edge over its competitors. This could help boost India’s textile exports,” said Prabhu Dhamodharan, Convenor of the Indian Texpreneurs Federation.

Potential Boost from Policy Changes

A key factor in India’s textile exports will be buyer sentiment in the US. Industry experts believe that removing India’s 11% import duty on cotton could further strengthen trade ties. If India eliminates this duty, the US may also reduce or remove tariffs on Indian textile products.

India’s Apparel Export Promotion Council (AEPC) has already urged the government to introduce a ‘zero for zero’ duty policy. This means India would remove import duties on textiles, encouraging the US to do the same for Indian exports.

Current US Textile Market Trends

According to US trade data for 2024:

• China accounted for 30% of US textile imports, worth $36 billion.

• Vietnam followed with a 13% share, valued at $15.5 billion.

• India had an 8% share, contributing $9.7 billion.

• Bangladesh, affected by political instability, saw its share drop to 6%, amounting to $7.49 billion.

Overall, the US imported $107.72 billion worth of textiles in 2024, with clothing imports making up the majority, increasing by 2% from $77 billion in 2023 to $79 billion in 2024.

India’s Strong Position in the Global Market

Compared to its competitors, India’s economy is less dependent on the textile sector. Textiles contribute only 2% to India’s GDP, while Bangladesh and Vietnam rely more heavily on the industry, with contributions of 11% and 15%, respectively.

Key Beneficiaries in India

Several Indian textile companies stand to benefit from this shift, including Trident, Welspun India, Arvind, KPR Mill, Vardhman, Page Industries, Raymond, and Alok Industries. These firms generate between 20% and 60% of their revenue from the US market, making them well-positioned to take advantage of the changing trade dynamics.

Conclusion

The new tariff structure in the US presents a significant opportunity for India’s textile industry. If trade policies align favorably, and India removes import duties on cotton, the country could strengthen its position in the global textile market. With competitors facing higher tariffs, India is poised to become a more attractive supplier for US buyers.

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