US tariff threat rises as India's apparel industry gains ground in UK, EU

Buying agents said India has already captured 5-10 per cent of UK apparel orders that earlier went to Bangladesh, driven by the recent free trade agreement

India’s textile and apparel industry is taking a cautious stand after the US Senate on Friday passed a bill that could pave the way for tariffs of up to 100 per cent on goods from India over its imports of Russian oil and gas.

 

The development comes as India’s apparel exports to the US declined 18 per cent in the first six months of the year, while total US apparel imports from all countries fell by an average of 9-13 per cent, according to industry estimates.

 

The decline was largely attributed to US buyers front-loading apparel purchases in anticipation of possible sanctions in the first half of 2025.

   

However, in a sign of relief, buying agents told Business Standard that India has already captured 5-10 per cent of orders from the UK that previously went to Bangladesh, following the recently signed Comprehensive Economic and Trade Agreement (Ceta). Industry players are also hopeful that the Indian government will address the decline in US-bound orders by fast-tracking trade deal talks with Washington or through negotiations.

 

“During the first six months, orders from India witnessed an 18 per cent decline versus last year. We have lost some market share too. Definitely, 100 per cent tariff will be a threat, and its business implications will be multifold for textile players. We believe negotiations will work as India has also increased crude purchases from the US by 40 per cent versus last year; other goods are also witnessing a similar trend,” said Prabhu Dhamodharan, convenor at Indian Texpreneurs Federation (ITF).

 

From January to June, US apparel imports stood at around $35.1 billion. Vietnam accounted for 22.4 per cent, followed by Bangladesh at 11.4 per cent, China at 10.2 per cent, Indonesia at 6.65 per cent and India at 6.05 per cent, according to ITF data. Industry experts said India’s share had changed only marginally despite concerns over US tariffs.

 

“We are not seeing any immediate reduction in export orders to the US. It is too early to press the panic button. We also believe that the government may sign a bilateral treaty very soon,” said Elangovan Viswanathan, president of the Buying Agents Association and managing director of SNQS International.

 

“We also see large volumes of orders shifting from Bangladesh to India. Around 5-10 per cent of UK orders are being diverted to us. The EU is also witnessing a similar shift. We need to be ready with the infrastructure and workforce. I expect most of the core basic products will move to Bangladesh,” Viswanathan added.

 

The bill passed by the US Senate would empower President Donald Trump to impose tariffs on goods from the five countries that are currently the largest importers of Russian oil and gas — China, India, Azerbaijan, Hungary and Slovakia. The legislation will now go to the US House of Representatives and, if cleared, will be sent to Trump for final approval.

 

“I don’t think the Congress will pass it. We will have to wait and watch,” said another industry source.

 

Meanwhile, India’s textile exports grew nearly 10 per cent in June 2026, but apparel shipments fell 11.25 per cent, according to data shared by the Confederation of Indian Textile Industry (CITI). Cumulative textile and apparel exports stood at $2.91 billion in June, up just 0.21 per cent from the same period last year.

 

“This is a thing to worry about for Indian exporters. We need to work more on getting the EU free trade deal agreement signed sooner and also look at diversification,” said Sanjay Kumar Jain, managing director of Delhi-based TT Ltd and chairman of the ICC National Textiles Committee.