Gokaldas, Arvind, Trident dip up to 6%; why textile stocks under pressure?

The government has halved benefits under the RoDTEP scheme for exporters in textiles, and gems & jewellery, restricting incentives to 50% of notified rates and value caps with immediate effect.

Textile shares today

Shares of textile companies Gokaldas Exports, Arvind, Trident and Pearl Global Industries fell up to 6 per cent on the BSE in Tuesday’s intra-day trade. In the past two trading days, these stocks have declined up to 11 per cent. 

Among individual stocks -  Gokaldas Exports was down 6 per cent at ₹703.2 in intra-day trade today. It has dropped 11 per cent in the past two trading days. 

The stock price of Arvind also declined 6 per cent to ₹352 in intra-day trade, while Pearl Global Industries (₹1,549.10) and Trident (₹25.81) were down 3 per cent each. In comparison, the BSE Sensex was down 1 per cent at 82,440.58 at 10:50 AM. 

However, despite the past two-day decline, the stock price of Gokaldas Exports has zoomed 31 per cent in the past one month. Arvind has rallied 19 per cent and Pearl Global Industries surged 14 per cent, as against less than 1 per cent rise in the benchmark Sensex.  FOLLOW LATEST STOCK MARKET UPDATES LIVE

Why are textile stocks under pressure?

The government has halved benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for exporters in textiles and gems & jewellery, restricting incentives to 50 per cent of notified rates and value caps with immediate effect.  

The financial year 2026-2027 (FY27) allocation has been cut 45 per cent to ₹10,000 crore from ₹18,233 crore in FY26. RoDTEP rates currently stood in the range of 0.3 per cent to 3 per cent. Post the cut on rates the rebate on unginned raw cotton has been reduced to 1.55 per cent (capped at ₹0.80/kg) from 3.1 per cent (capped at ₹1.60/kg). Amid weak global demand and the US tariffs, the move raises competitiveness concerns. Also, halving RoDTEP is expected to increase export costs by 1–2 per cent for exporters.  READ | Bharti Airtel dips 4%, sees sharpest intra-day fall in 3 months; here's why 

According to ICICI Securities, this comes at the time when uncertainties are hovering around tariffs and global exports. The exporters might have to take the burden of 1-2 per cent cost increase on the profitabilty. On the other hand, Donald Trump's administration is considering new national security tariffs; New tariffs, to be issued under Section 232, would be separate from 15 per cent global tariffs. These uncertainties will weigh on the textile stocks in the near term, the brokerage firm said in a note. 

Meanwhile, the India –European Union (EU) Free Trade Agreement (FTA) is likely to act as a strong catalyst for Indian textile exporters, as the removal of import duties improves price competitiveness and drives volume growth. Analysts at Elara Capital in textile sector report said that the garment exporters would get into expansion mode going forward with import duties in the EU and UK markets being favorable for India.  ===================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.