Textile industry seeks policy support as US tariffs trigger export downturn

As India's textile industry grapples with steep United States (US) tariffs, key industry bodies have renewed calls for policy support, warning against the sector's deepening downturn.

 

The Confederation of Indian Textile Industry (CITI) has urged the Reserve Bank of India (RBI) to add spinning, weaving and processing units to its recently announced trade relief measures, arguing that these segments are under mounting stress, reported PTI.

 

“Given that spinning, weaving and processing units are also facing pressure, adding these units to the list of sectors eligible under the trade relief measures would greatly benefit the overall growth and development of India’s textile and apparel sector,” said Ashwin Chandran, chairman of CITI.

 

Similarly, the Apparel Export Promotion Council (AEPC) has pressed for longer-term support, including a five-year extension of the interest equalisation scheme, continued Rebate of State and Central Taxes and Levies (RoSCTL) benefits for at least five years, and the creation of a 'Market Diversification Fund' to help companies tap high-tariff destinations, the report added.

 

AEPC Secretary General Mithileshwar Thakur said exporters were grappling with weak retail demand in the US and European Union. “In the USA due to high persisting tariff, Indian suppliers are forced to offer huge discounts just to retain customer base,” he said.

 

India's textile exports

The development comes after India’s textile exports fell 12.92 per cent in October, with apparel shipments dropping 12.88 per cent, hit by Washington’s 50 per cent tariff. The US is India’s biggest market for textiles and apparel. In 2024–25, the sector was valued at about $179 billion, including a $142 billion domestic market and $37 billion in exports, according to the government data.

 

"The October decline is on expected lines. The US share of India's total textile and garments exports is about 30 per cent. The pipeline inventory is still being shipped out, but fresh orders have stopped coming in post-August. We expect the decline in textile and apparel exports to continue and worsen to 15-20 per cent in November and December," Sanjay K Jain, former Chairman of the Confederation of Indian Industry (CITI), told PTI.

 

He added the sector may only see a rebound a few months after a proposed India–US bilateral trade agreement is implemented.

Centre's support to textile industry

It also comes a day after the textiles ministry rescinded the Quality Control Order (QCO) on a key textile raw material — viscose staple fibre (VSF) — with immediate effect to improve ease of business for textile manufacturers, exporters.

 

“This policy move comes at a crucial time as India’s textile sector pursues the ambitious Vision 2030 — aiming to boost domestic consumption and meet the target of $100 billion in exports while growing the total textiles and apparel market to $350 billion,” the ministry said.