Textile stocks surge after India-US trade deal, Budget measures add tailwinds

Shares of textile companies rallied sharply on Tuesday after India and the United States agreed to a trade deal that lowers tariffs on Indian exports, improving earnings visibility for a sector heavily dependent on the US market.

Gokaldas Exports Garware Technical Fibres and Indo Count Industries hit their upper circuits of 20%. Welspun Living jumped 17.12%, Vardhman Textiles rose 12%, Arvind gained 10.93%, Trident advanced 10.58%, Raymond Lifestyle climbed 6.80%, and Bombay Dyeing and Manufacturing Company added 4.37%.

Under the agreement, Washington will cut reciprocal tariffs on Indian goods to 18% from 25%, U.S. The deal comes as a relief for textile exporters, many of whom derive 50% to 70% of their revenue from the US.

 

Indian textile exports will now face a lower tariff than competing garment hubs such as Vietnam and Bangladesh, which attract duties of about 20%, boosting Indias relative competitiveness in the US market.

Sentiment in the sector was further supported by Budget announcements aimed at strengthening Indias textile ecosystem. Finance Minister Nirmala Sitharaman, in her Budget 2026-27 speech, announced the setting up of Mega Textile Parks under a challenge mode, with a focus on bringing value addition to technical textiles.

To support traditional segments, the government announced the launch of the Mahatma Gandhi Gram Swaraj Initiative, aimed at strengthening khadi, handloom and handicrafts. It also announced initiative to help in global market linkage, branding and will streamline and support training, skilling, quality of process and production.

In a boost to exports of textiles, leather and marine products, the Budget extended the export obligation period from six months to 12 months for exporters using duty-free imported inputs, a move expected to ease compliance pressures and improve working capital management for exporters.

Sitharaman said the government will roll out an integrated programme for the labour-intensive textile sector with five sub-parts, including a National Fibre Scheme to promote self-reliance in natural fibres such as silk, wool and jute, man-made fibres, and new-age fibres.

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