Textile stocks slip up to 9% on US tariff; should you buy, hold or sell?

In the medium to long term India's tariff rate are competitive with other major exporting countries and hence exports order will normalise once tariff effect gets absorbed in the market.

Shares price of textile companies today: Shares of textiles companies, including garments and apparel, have slipped up to 9 per cent on the BSE in Thursday’s intra-day trade after US President Donald Trump announced a 25 per cent tariffs on India.

 

Trump confirmed levying 25 per cent tariffs on India from August 1, 2025. Further, he indicated imposing a penalty for India's continued energy and defence ties with Russia.

 

Gokaldas Exports, Faze Three, Pearl Global Industries, Welspun Living, KPR Mill, Arvind, Vardhman Textiles, Indo Count Industries, Kitex Garments and Sangam India were down in the range of 3 per cent to 8 per cent on the BSE in intra-day trade. In comparison, the BSE Sensex was down 0.59 per cent at 81,003.33 at 09:28 AM.  Track LIVE Stock Market Updates Here

Views on textile stocks

The US is India's largest market for textile and apparel exports. During January-May 2025, US imports of textile and apparel from India were valued at $4.59 billion, a rise of more than 13 per cent compared to the same period last year, when the figure stood at $4.05 billion.

 

India's tariff rate of 25 per cent is in line or low compared with other export countries, such as levy on Bangladesh, which levies 35 per cent, while the US levied 20 per cent tariffs on Vietnam and an additional 40 per cent tariffs on transhipment of goods from Vietnam, owing to trade routed by China via Vietnam. China currently faces 30 per cent tariffs due to ongoing trade talks until mid-August.  ALSO READ | Trump 25% tariff on India: 5 textile, jewellery stocks may crack up to 27%

 

ICICI Securities believes that it tariff rate of 25 per cent, which will be implemented on India (from August 1, 2025), will lead to down trading, lower realisation due to sharing of tariff with suppliers and impact the profitability of the textile companies in the near term. 

 

However, in the medium to long term, India's tariff rates are competitive with other major exporting countries and hence export orders will normalise once the tariff effect gets absorbed in the market.

 

Further Indian Government has also taken cognisance of Trump's statement and is focusing on signing a fair deal with the US.  

 

 

  Indian textile companies are also focusing on expanding their reach in other markets such as the UK, the EU and the Middle East in the coming years. Hence long-term business fundamentals of textile companies are intact. The brokerage firm in a note said that they believe the trump statement of imposing a 25 per cent tariff will have a knee-jerk reaction on the textile stocks.  The Confederation of Indian Textile Industry (CITI) feels that the new US tariff rate for India presents a stiff challenge for India’s textile sector. However, CITI remains hopeful that the tariff issue will get resolved once the proposed bilateral trade agreement (BTA) between India and the United States is in place.

 

While recent discussions around potential tariff adjustments have introduced a degree of volatility and uncertainty, Indo Count remains cautiously optimistic and is closely monitoring negotiations on trade tariffs and a Bilateral Trade Agreement (BTA) between India and the US, expected to conclude by late 2025. The US remains Indo Count’s largest export market, contributing nearly 70 per cent of total revenues.

 

The landmark India-UK Free Trade Agreement (FTA) announced in May 2025 is a strategic inflexion point. With tariff elimination on over 99 per cent of Indian exports, including home textiles, India gains a significant competitive edge. UK import duties on home textile products previously ranging from 8-12 per cent have been fully removed, enabling stronger price positioning and margin expansion, the company said.