New Delhi, April 3 – The recent imposition of retaliatory tariffs by the United States has placed India in a favorable position in global textile exports, as the country gains a relative cost advantage over key competitors like China, Vietnam, and Bangladesh.
Under the administration of Donald Trump, the US has announced a 27 percent tariff on Indian goods, citing India's high import duties on American products. The move is aimed at reducing America's trade deficit and boosting domestic manufacturing.
Industry experts suggest that the new tariff structure may inadvertently benefit Indian textile exporters. Raymond Group’s Chief Financial Officer Amit Agarwal noted that India now enjoys a strategic edge over other garment-exporting nations. He said that the company has already begun receiving inquiries from American clients regarding production capacity availability.
Echoing the sentiment, Paresh Parekh, Partner and Retail Tax Leader at EY India, said India is currently positioned in a “favorable advantage” scenario for textile exports. He explained that India competes globally with nations like Bangladesh, Vietnam, Cambodia, Sri Lanka, China, and Pakistan in the textile sector. With the US imposing higher duties on these nations—54 percent on China, 46 percent on Vietnam, 49 percent on Cambodia, 44 percent on Sri Lanka, and 37 percent on Bangladesh—India's comparatively lower 27 percent tariff presents an export opportunity.
The US imports over $36 billion worth of textiles from India annually. Parekh added that the current situation offers a window for Indian textile exporters to increase their market share in the US. However, he cautioned that if the tariffs result in higher prices, a slowdown in American consumer demand could shrink the overall market.
Some exporters remain cautious. Shiraj Askari, Chairman of Apollo Fashion International, pointed out that the tariffs could pose a challenge, particularly for businesses operating on tight margins. While short-term price and demand disruptions are likely, Askari said India’s robust supply chain, skilled workforce, and manufacturing quality give it long-term resilience.
Agarwal also acknowledged that other global markets might continue sourcing from countries facing higher US tariffs, presenting competition for India in those regions.
Nevertheless, Askari agreed that India remains better positioned compared to nations like Vietnam and Bangladesh. He emphasized the need to focus on improving operational efficiency, strengthening compliance, and diversifying markets to avoid overdependence on a single destination. He said the industry has weathered previous disruptions and must now take smart and decisive action.
Anand Ramanathan, Partner and Consumer Industry Leader at Deloitte India, added that lower US tariffs compared to those imposed on other Asian competitors will enhance the competitiveness of Indian textile exports.
