A dramatic overhaul in US tariff policies has sent ripples through the global textile trade, with India emerging as a potential gainer in this reshaped economic terrain. The United States, in a bid to strengthen domestic manufacturing, has imposed substantial levies on textile imports—placing a 27 percent tariff on Indian shipments, while levies on competing nations such as Vietnam, Bangladesh, and Cambodia stand even higher at 46, 37, and 49 percent respectively.
For India, which exported roughly $10 billion worth of textiles to the US in FY 2023-24—a figure representing nearly 28 percent of its overall $36 billion export volume—this recalibrated trade dynamic presents a window of opportunity laced with complex challenges. At face value, the lower comparative tariff may offer Indian exporters a strategic head start in a globally competitive market. Yet the backdrop remains fraught with structural impediments that could blunt any temporary advantage. Indian manufacturers continue to grapple with recurring hurdles including rising input costs, frequent raw material disruptions, labour supply uncertainties, and growing global pressure to decarbonise operations.
These issues are no longer peripheral but central to future-proofing the industry. With global buyers increasingly aligning with climate-positive and socially responsible supply chains, Indian textile players must accelerate the shift toward environmentally sustainable and ethically compliant practices if they are to retain long-term favour in markets like the US. Despite India’s potential to benefit from this policy disruption, US consumers may be staring at a less encouraging picture. The elevated cost of imports caused by the sweeping tariffs is expected to trickle down to retail shelves, fuelling price hikes for everyday apparel and textile goods. This inflationary pinch could impact consumer behaviour, with many opting for budget alternatives or delaying discretionary purchases. While India could plug some of the affordability gap, particularly due to its vast mid-scale manufacturing base, its capacity to meet sustained demand at competitive pricing remains under scrutiny amid rising domestic overheads.
Interestingly, while the US targets imports with protective tariffs, its domestic textile and apparel industry has experienced unexpected momentum. Data from 2021 revealed a surge of $3.4 billion in US textile and apparel exports—an 18.3 percent jump that brought total exports to $22.3 billion. A significant portion of this growth stemmed from fibre and yarn exports, which alone saw a 23.8 percent rise. This shift may signal a repositioning of the US as not just a buyer but a credible player in downstream textile production, further muddying waters for traditional exporters like India.
The current scenario is not merely a trade recalibration but a wake-up call for Indian policymakers and industry leaders to revisit the blueprint for the nation’s textile future. With the sector employing over 45 million people and contributing close to 2 percent of India’s GDP, its strategic importance is beyond dispute. The intersection of trade policy, sustainability expectations, and shifting consumer patterns presents both a trial and an opportunity. It is no longer enough for Indian textiles to be competitive—they must be clean, green, and future-ready. Only then can India convert this moment of tariff-triggered disruption into a sustainable upswing in global textile leadership.
