India threads trade advantage as US reciprocal tariffs fray textile majors

The advantage could grow if trade negotiations lead to zero-duty cotton imports. Under Trump's tariff plan, Vietnam's textile exports will face a 46% duty, Bangladesh's 37%, and China's 54%

President Donald Trump’s decision to impose tariffs on all imports to the US gives India’s textile industry a competitive edge, as rivals such as Vietnam, Bangladesh, and China will face higher duties, experts say. However, inflation-driven buyer sentiment could dampen the potential gains for India.

 

The advantage could grow if trade negotiations lead to zero-duty cotton imports. Under Trump’s tariff plan, Vietnam’s textile exports will face a 46 per cent duty, Bangladesh’s 37 per cent, and China’s 54 per cent. Other key players, including Sri Lanka (44 per cent) and Cambodia (49 per cent), will also be affected. India, in contrast, will face a reciprocal tariff of 27 per cent (according to the White House, after Trump initially stated 26 per cent).

 

“These duty structures are very high. This may lead to inflation and higher prices, reducing consumer demand. If the situation remains unchanged, India will benefit in the long run,” said Naren Goenka, founder and managing director, Texport Industries.

 

According to an industry expert, companies such as Trident, Welspun India, Arvind, KPR Mill, Vardhman Textiles, Page Industries, Raymond, and Alok Industries stand to gain, as revenue from the US market accounts for 20-60 per cent of their earnings.

 

A Sakthivel, former chairman of the Apparel Export Promotion Council (AEPC), said that Türkiye and Brazil — facing a 10 per cent tariff — could also emerge as attractive sourcing destinations for US buyers. Some apparel orders might also shift to Italy, Germany, and Spain, where tariffs stand at 20 per cent.

 

“In the past, India, Bangladesh, and Vietnam faced similar tariff structures for cotton apparel exports. However, with these recent changes, India now has a comparative tariff advantage, which could enhance its competitiveness in the US apparel market,” said Prabhu Dhamodharan, convener of the Coimbatore-based Indian Texpreneurs Federation.

 

According to 2024 US textile shipment and bill of lading data, China accounted for nearly 30 per cent of US textile imports, valued at $36 billion. Vietnam followed with $15.5 billion (13 per cent), while India’s share stood at $9.7 billion (8 per cent). Bangladesh, which previously held a larger share, saw its US textile exports drop to 6 per cent ($7.49 billion) due to political turmoil in 2024.

 

Total US textile imports for the year amounted to $107.72 billion. Clothing, which makes up the bulk of these imports, rose by about 2 per cent to $79 billion in 2024 from $77 billion in 2023.

 

“It looks negative for the global market, and short-term buying will slow as companies deplete their inventory while awaiting tariff relief through renegotiations. However, if these tariffs persist, the US will have no choice but to continue sourcing apparel. Compared to all major global textile suppliers — except the European Union — India will be the cheaper option, making it the preferred sourcing destination,” said Sanjay Kumar Jain, managing director of textile producer TT.

 

“If India reduces its cotton import duty from 11 per cent to zero, both countries will benefit. The ball is now in India’s court,” said K Venkatachalam, chief advisor at the Tamilnadu Spinning Mills Association.

 

India’s AEPC has already urged the textile ministry to implement a ‘zero for zero’ duty policy, arguing that eliminating import duties on textile products would encourage the US to do the same for Indian exports.

 

“India is well-positioned to expand its US market share, thanks to this tariff advantage. Ongoing trade negotiations could further strengthen India’s position, especially if the country offers zero-duty cotton imports in exchange for sector-specific benefits in apparel exports. This could be a game changer for the industry,” Dhamodharan said.

 

Another advantage for India is that textiles contribute just 2 per cent to its gross domestic product, compared to 11 per cent in Bangladesh and 15 per cent in Vietnam, making it less vulnerable to external shocks.