Having set an ambitious goal of increasing its exports to $100 billion by 2030, the Indian textile industry has been shaken by the imposition of 25 per cent tariffs on India’s textiles and clothing by the US. This move comes as a major shock, especially as India was making strides in negotiating a Bilateral Trade Agreement (BTA) with the US to lower tariffs.

According to Dr SK Sundararaman, Chairman, Southern India Mills’ Association (SIMA), this unexpected tariff poses a serious setback that could negatively impact India’s export performance in the short term. With the festival season approaching, the new tariff could severely affect summer export orders.

A critical market for India, the US accounts for nearly 30 per cent of its total garment exports. India currently exports about $11 billion worth of textiles and clothing to the US and has seen its market share grow from 4.5 per cent in 2020 to 5.8 per cent in 2024. Before this new tariff, Indian exports faced duties of up to 16 per cent on readymade garments, which already hurt their competitiveness.

While a 25 per cent tariff may seem manageable compared to those on other countries, the real concern for the industry is the penal tariff, the full impact of which is not yet clear. Dr. Sundararaman has appealed to the Indian Prime Minister to intervene with the US President to withdraw the penal provisions and expedite the bilateral negotiations scheduled for later this year.