India-US deal: Textile players stitch back frayed hopes after tariff cut

The additional 50 per cent tariff imposed by the US, which had been in place for three consecutive months until November, has now given the sector a new lease of life following the tariff cut. Exports of textiles and apparel to the US in 2026-27 (FY27) are expected to grow in double digits, driven by the India-US trade deal, industry experts said.

 

According to data shared by the Confederation of Indian Textile Industry (CITI), US imports from India dipped by 5 per cent, 30.1 per cent, and 31.4 per cent in September, October, and November, respectively. However, imports from India during January–November rose 2.3 per cent. This is expected to provide momentum to India’s ambitious target of achieving $100 billion in textile and apparel exports by 2030, up from $37.7 billion in 2024-25 (FY25). The revised 18 per cent tariff gives Indian exporters a 2 percentage point (pp) advantage over rivals such as Vietnam and Bangladesh, which face a 20 per cent tariff.

 

India’s share of the $80 billion US apparel import market rose from about 5 per cent to nearly 7 per cent over the past two years, before dipping temporarily in November due to short-term disruptions rather than structural weakness. “With the new trade arrangement giving India a relative advantage over competing sourcing countries, the industry expects a quick return to a 6–7 per cent market share and is confident of double-digit export growth in the coming financial year,” said Prabhu Dhamodharan, convenor, Indian Texpreneurs Federation.

 

According to industry thumb rules, every 1 pp of market share translates into roughly ₹7,000 crore in exports. From FY27, the sector is likely to see month-on-month double-digit growth in apparel and home textile exports, lifting the monthly apparel export run rate to $1.5–1.6 billion from the current $1.27 billion. At nearly $11 billion, India’s textile and apparel exports to the US accounted for close to 28 per cent of the country’s total exports in this category during FY25.“This highly positive development is a major boost to India’s goal of achieving $100 billion in textile and apparel exports by 2030, the Make in India initiative, and job creation in the micro, small and medium enterprise-driven textile and apparel industry,” said Ashwin Chandran, chairman, CITI.

 

An analysis by CITI of data from the US Office of Textiles and Apparel showed that US imports of textiles and apparel from India fell 31.4 per cent in November 2025 compared with November 2024. 

 

Cotton import duties now the swing factor

 

The CITI chairman said the industry is awaiting greater clarity on cotton, observing the strong complementarity between the US and India in the commodity. India’s textile and apparel exports are largely cotton-driven. The US–India joint statement on the framework for an interim agreement on reciprocal and mutually beneficial trade said India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.

 

“CITI believes that removing import duty on cotton of all varieties will reduce the divergence between domestic and global prices and help restore the competitiveness of India’s spinning and textile industries. This would also allow the minimum support price (MSP) and other farmer-support mechanisms to function as intended, without creating significant downstream price distortions. During the current cotton season, the MSP of kapas (raw cotton) has increased by nearly 8 per cent.”

 

“The tariff eliminations and enhanced market access under this agreement will greatly strengthen the global competitiveness of India’s textile and apparel sector. It will also address non-tariff barriers, reduce compliance burdens, and cut procedural delays, enabling faster movement of goods to the US market,” said A Sakthivel, chairman of the Apparel Export Promotion Council.The 50 per cent US tariff on Indian goods, effective August 27, 2025, had adversely affected several textile and apparel companies, raising concerns over job losses across the sector. Knitwear hub Tiruppur has already recorded losses of ₹15,000 crore in 2025 due to higher US tariff.