Textile industry seeks export incentive to minimise US tariff impact

The US is India's largest market for textile and apparel exports, and had clocked around $4.59 billion worth of exports during the January to May 2025 period

Indian textile and apparel industry players on Wednesday raised concerns over the revised US tariff and sought immediate government intervention, including renegotiations with the US or an immediate rollout of export incentives in cash to minimise the impact on exporters. Industry bodies also batted for speedy implementation of a bilateral trade agreement (BTA).

 

The US is India’s largest market for textile and apparel exports, and had clocked around $4.59 billion worth of exports during the January-May 2025 period, up 13 per cent compared to the same period last year, when the figure stood at $4.05 billion.

 

“This is a huge setback for India’s textile and apparel exporters as it has further complicated the challenging situation we were already grappling with. It will significantly weaken our ability to compete effectively vis-à-vis many other countries for a larger share of the US market,” said Rakesh Mehra, chairman of the Confederation of Indian Textile Industry (CITI). He said that a well-rounded BTA with the US, which takes proper care of India’s sovereign interests and is also fair and balanced, could be a win-win proposition for both nations. 

 

"Only solution is to give an immediate export incentive in cash, with country-centric focus. Then we can stand up and negotiate," said Sanjay Kumar Jain, managing director of textile producer TT Ltd. "This is a very difficult situation for India, especially for exporters. All the labour-intensive sectors are being hit. There are companies in the sector that have even 10,000 employees with almost 60 per cent of exports to the US. They are in a spot," he added.

 

CITI said that the government should fast-track the introduction of measures to limit the hardship likely to be faced by local textile and apparel exporters following the most recent US tariff decision. After a promising performance in the first quarter of the 2025 calendar year (Q1CY25), there was a notable slowdown in textile and apparel exports from India to the US in June.

 

"It is our fervent appeal to the government to urgently take steps to come to the aid of India’s textile and apparel sector during these hugely testing times, given the government’s strong commitment to increase the competitiveness of local industry," Mehra added.

 

India has set itself a target of achieving textile exports worth $100 billion by 2030. The new US tariff for Bangladesh and Vietnam is 20 per cent, and for Indonesia and Cambodia is 19 per cent. Currently, China is the biggest exporter of textiles and apparel items to the US, followed by Vietnam, India, and Bangladesh.