Vardhman Textiles, Indo Count, Welspun Living rally up to 9%; here's why

Textile stocks rallied in Tuesday's intra-day trade after the finance ministry removed the 11 per cent duty on raw cotton imports for a period of 42 days till September 30, 2025.

Textile companies share price performance

 

Shares of textile companies were in focus and rallied up to 9 per cent on the BSE in Tuesday’s intra-day trade after the finance ministry on Monday removed the 11 per cent duty on raw cotton imports for a period of 42 days till September 30, 2025.

 

Among individual stocks, Vardhman Textiles (₹447.05) and Nahar Spinning (₹225.15) surged 9 per cent each. Kitex Garments, Welspun Living, Indo Rama Synthetics (India), Nitin Spinners, Indo Count Industries, Siyaram Silk Mills and Gokaldas Exports were up in the range of 3 per cent - 8 per cent on the BSE in intra-day trade. In comparison, the BSE Sensex was up 0.14 per cent at 81,397 at 09:37 AM.

 

However, in the past one month, textile stocks have underperformed the market by falling up to 21 per cent after the US President Donald Trump announced up to 25 per cent tariff on imports from India, and an additional 25 per cent if India continued with its energy and defence ties with Russia. Meanwhile, the BSE Sensex was down 1 per cent in the past one month.  Track Stock Market LIVE Updates 

Why are textile stocks in focus today?

 

The government has scrapped import duty as well the Agriculture Infrastructure and Development Cess (AIDC) on cotton effective from August 19, 2025 till September 30, 2025 to mitigate from pressure of a large tariff of 50 per cent imposed by the US government on Indian exports. Custom duty on imports of cotton currently stands at 11 per cent.

 

The exemption will benefit the textile chain - yarn, fabric, garments and made-ups - and provide relief to the textile industry and consumers.

 

The removal of import duty on cotton was a long-pending demand of industry bodies such as the Confederation of Indian Textile Industry (CITI). This move is crucial in making the industry competitive, as it requires high-quality, contamination-free cotton to meet global quality compliance standards for exports. Removal of duty on raw cotton is expected to have a salutary effect on cotton prices in India, Business Standard reported. CLICK HERE FOR FULL REPORT

 

ICICI Securities believe this is the right move taken by the government to safeguard the interest of the textile industry. There is a possibility that it will be extended till the government signs an appropriate deal with the US in the near future.

 

However, according to Gokaldas Exports, the recently revised reciprocal tariffs imposed by the US on India is expected to pose a challenge in the second half of this financial year as most of the company’s order bookings for the second quarter are already closed. Brands are cautious and want to know the tariff impact on various geographies for committing their orders. India has a large export business of $16 million per annum. It's impossible for any brand to find alternative solutions for this volume elsewhere in the short run, the garments & apparels company said in its Q1FY26 earnings conference call on August 13.

 

A clarity on the tariff imposed on India over the next few months will allow this churn to settle. In the meanwhile, a higher tariff from August across all regions would impact business volumes in the short run. As most of the countries which export apparel, barring China and India, tariffs are at about 20 per cent. So that would have a potential inflationary impact in the market and could impact business volumes going forward, Gokaldas Exports said.