The strategic reduction of US import tariffs on Indian textile and apparel products from 50 per cent to 18 per cent marks a major inflection point, restoring India’s competitiveness in its largest overseas market after months of margin pressure and disrupted global sourcing patterns.
India’s textile and apparel industry sees the $100 billion export target as achievable after the India–US trade deal sharply reduced tariffs from 50 per cent to 18 per cent.
The move gives Indian exporters a 2 per cent cost advantage over key rivals, restores competitiveness in the US market, improves capacity utilisation, and is expected to unlock fresh investments and higher production.
Sidharth Khanna, president of The Northern India Textile Mills’ Association (NITMA), noted, “Sustained diplomatic engagement and strategic negotiations by the Indian government were instrumental in securing the agreement and strengthening India–US trade relations. Since August 2025, Indian exporters had been navigating a challenging environment marked by a steep 50 per cent tariff barrier, leading to squeezed margins and temporary shifts in sourcing towards competing countries.”
The revised 18 per cent tariff now provides Indian exporters with a 2 per cent cost advantage over major competitors such as Vietnam and Bangladesh, which continue to face tariffs of around 20 per cent, effectively repositioning India as a preferred sourcing destination for US brands and retailers.
Khanna said the agreement is expected to immediately revitalise the domestic manufacturing ecosystem. Capacity utilisation at mills that had seen sharp production declines is likely to improve. NITMA also expects the removal of trade uncertainty to unlock fresh investments, including faster progress on large-scale initiatives such as PM MITRA parks and higher inflows of domestic and foreign direct investment.
Separately, exporters in Tiruppur also welcomed the tariff reduction, describing it as timely relief for Indian textile exports. K M Subramanian, president of the Tiruppur Exporters’ Association (TEA), said, “The revised 18 per cent tariff, which is lower than that applicable to several competing exporting countries, underscores India’s improved trade positioning and strategic importance as a sourcing destination.”
The association noted that the move aligns with the Prime Minister’s vision, with manufacturers increasingly scaling up production, particularly in man-made fibre garments that account for nearly 65 per cent of global apparel consumption.
Fibre2Fashion News Desk (KUL)
