Trump tariffs unlikely to impact rising Indian textile exports, say experts

Discussions between India and the US to reduce tariffs are in full swing with less than a month left for US President Donald Trump’s reciprocal tariff plan to be implemented.

 

A number of sectors may be impacted if both the countries do not reach a consensus.

 

However, industry experts said that the textiles industry is unlikely to have any major impact because neither of the countries has any differential advantage with regard to tariffs.

 

On Friday, Trump had said that India has agreed to reduce its ‘massive tariffs’. This comes at a time when textile hubs like Tiruppur (Tamil Nadu) are seeing a spike in orders from the US.

 

The Indian industry witnessed a 14 per cent rise in revenue from exports to the US in the April-December period of 2024-25 in ready-made garments (RMG).

 

During the period, India’s total RMG exports were at $11.30 billion, compared to $10.13 billion during the April-December period of 2023-24.

 

In 2024-25, out of the total exports in the segment, around 34 per cent or $3.79 billion came from the US, up from $3.34 billion in the previous financial year.

 

The UK is a distant second with exports of $974 million, up 9 per cent compared to the previous financial year.

 

In terms of tariffs on textiles and clothing, while India imposes a 10.4 per cent tariff on US imports, the tariff for Indian importers in the US is 9 per cent.

 

“We don’t have any differential advantage in textiles and garments. Definitely, we are in an advantageous position with regard to the US market after the Bangladesh crisis. We are more competitive as a market, too, for the US,” said Sanjay Kumar Jain, managing director (MD) of textile producer TT Ltd. 

Interestingly, the uncertainties over Trump’s tariff measures come at a time when textile hubs like Tiruppur are weaving a success story.

 

Between April and December, Tiruppur’s exports reached ₹26,000 crore, almost eclipsing the previous financial year’s total of ₹30,690 crore, according to sources in the Tiruppur Exporters’ Association (TEA).

 

The final tally for 2024-25, based on conservative estimates, could soar as high as ₹35,000-40,000 crore. Tiruppur accounts for 55 per cent of India’s knitwear exports. 

“We expect both the governments to take positive steps to solve any possible crisis. I hope these tariff concerns will not affect us. We are getting more orders from the US market this year,” said K M Subramanian, president of the TEA.

 

The list of buyers from Tiruppur includes global heavyweights like Primark, Tesco, Next, Marks & Spencer, Warner Bros, Walmart, and Tommy Hilfiger. Australian brands like Target and Woolworths, along with European players like Duns, have also placed significant orders. 

Trump’s decision to double down on his 'reciprocal tariffs' from April 2 is expected to lead to a fall in India’s exports to the US by $2-$7 billion in the financial year 2025-26, according to India Ratings and Research.