The Indian textile and apparel industry has shown the first clear signs of being impacted by the new US tariffs, as export data for September 2025 revealed a significant decline. The figures, compiled by CITI, indicate that the US administration's decision to impose an additional 25% penalty on Indian goods, bringing the total tariff to 50% for many products, has already begun to affect the industry. The tariffs, which came into effect on August 27, 2025, have raised concerns among exporters about a future of dwindling orders and a potential loss of market share.

Sanjay K. Jain, Chairman of the ICC National Textiles Committee, stated, "Things will worsen as pipeline order book shipments get completed as new orders are not coming. Once a customer moves out, it's not easy to get him back. Once skilled labor moves out, it's not easy to get them back."

Apparel exports take a major hit

Apparel exports, a labor-intensive sector and a key employer in India, saw a particularly sharp drop. According to the CITI data, exports for September 2025 amounted to $1,288.75 million, a decrease of 12.83% compared to $1,478.43 million in September 2024. This decline reflects a grim reality for manufacturers who are already facing stalled orders and requests from US buyers to absorb a portion of the tariff burden, as highlighted by a recent industry survey.

Textile exports also down, industry fears worsening situation

The broader textile sector, excluding jute, carpets, and handicrafts, also experienced a downturn. Exports in this category fell by 9.17%, from $2,135.03 million in September 2024 to $1,939.29 million in September 2025. Industry experts express concern that these figures are just the beginning. As existing orders, secured before the tariffs took full effect, are shipped, the true impact of the trade barrier will be revealed. Many fear that new orders are not forthcoming, a situation that could lead to job losses and a drain of skilled labor, which, once moved, is not easily recovered.

A survey by the Confederation of Indian Textile Industry (CITI) further reveals the "domino effect" of the tariffs. About one-third of textile and apparel exporters have reported a turnover drop of over 50% in their US business. This decline is largely due to requests for discounts from US buyers and order cancellations. As a result, around 85% of firms are experiencing an inventory build-up, while over 80% are dealing with an extended credit cycle of 3 to 6 months, which is putting a "substantial strain on liquidity". The survey also found that two-thirds of exporters have been forced to offer discounts of up to 25% to remain competitive in the US market.

The data for September 2025 is summarized in the table below:

Note: Figures for the textile category exclude Jute, Carpet, and Handicrafts.

Goods exports to US down, overall exports up

While the textile sector reels, overall Indian goods exports to the US also saw a significant drop of nearly 12% to $5.5 billion in September. This is the first full month since the 50% tariffs were imposed by US President Donald Trump. Despite this, India's overall goods exports for September held steady, rising 6.7% to $36.4 billion, with overall exports up 7%. This indicates that sectors like electronics, which saw exports rise over 50%, are helping offset the decline in tariff-hit sectors. However, the trade deficit with the US ballooned to $32.1 billion, a 13-month high.

Bilateral Trade Agreement: A race against time

Meanwhile, diplomatic efforts are in motion to find a long-term solution. An Indian delegation is in Washington this week for trade talks, with the goal of finalizing the first phase of a Bilateral Trade Agreement (BTA). Both nations are aiming for a fall deadline to conclude the deal. The BTA could provide much-needed relief from the high tariffs and help Indian exporters regain their competitive edge. However, with each passing day, the industry faces the risk of losing customers and skilled workforce, making a swift resolution crucial to prevent a more severe crisis.

The Textile Institute (TI) is set to celebrate a significant milestone at the ITMA Asia+CITME textile machinery exhibition in Singapore later this month.

At Booth B105 in Hall 8, TI will exhibit as a reciprocal member of the British Textile Machinery Association (BTMA), highlighting the strength of their collaboration. The two organizations' long-standing partnership has recently been cemented by the appointment of Jason Kent, CEO, BTMA as new Commercial Vice President, TI. The move brings fresh industry perspective and influence to the role.

Corporate membership of The Textile Institute gives organizations access to an international network of professionals, cutting-edge research, and strategic benefits valued at over $12,700 (£10,000) a year, says Kent

This membership provides a wide range of advantages, including global promotion and visibility, invitations to high-level networking and training events, opportunities for collaboration on industry-led research, professional recognition through chartered qualifications, and access to TI’s publications, data, and R&D resources.

As the only global professional body in this sector with a Royal Charter, the Institute drives the industry forward through high-quality events and training courses that equip professionals for the future, notes Stephanie Dick, CEO, TI. Together with their Corporate Members, the Institute tackles skills gaps, developing practical training solutions, and reaching international audiences.

The Textile Institute is uniquely positioned to help organizations stay competitive, connected, and compliant. Though it was first founded in Manchester in 1910, its mission has always been to be ‘not of Manchester, but international.’ With active sections and special interest groups across the globe, it now serves members in over 60 countries, empowering professionals across every link in the textile supply chain.

Along with major trade bodies like CITI and SGCCI, The Northern India Textile Mills’ Association (NITMA)  met officials from the Ministry of Textiles and Chemicals to register their intense opposition against the recommended anti-dumping duty (ADD) on Mono Ehtylene Glycol (MEG), warning the government it would deliver a ‘castatrophic blow to the sector.  NITMA cautioned , the duty would devastate the predominantly MSME-based downstream industry, jeopardizing millions of jobs and freezing critical investments.

The industry's primary fear is the massive cost escalation the ADD would cause. The proposed duty is estimated to raise MEG costs by an additional 20 per cent.

This hike will practically force MMF units across India to shut down, stated NITMA. The industry is in such a state of shock and panic that unit owners are ready to hand over the keys to their factories, as they cannot sustain this devastating blow, it added.

The downstream sector is already struggling with uncompetitive raw material prices. Before the Bureau of Indian Standards (BIS) quality control order, domestic polyester staple fiber (PSF) was already 15–20 per cent pricier than what global competitors, such as those in China, paid. The BIS order has since allowed domestic fiber producers to charge a premium of Rs 6–Rs 7 per kg over imported parity. Imposing the ADD on MEG would widen this uncompetitive gap even further, to approximately Rs 10–Rs 11 per kg, severely crippling MSME units.

The associations have called on the government to reject the DGTR recommendation immediately to safeguard the future of the Indian MMF sector.

Indian textile exporters are actively searching for new customers in Europe and offering discounts to their current US buyers. This shift is a direct response to the impact of high US tariffs, which are reportedly as high as 50 per cent, according to industry executives.

In August, Donald Trump, President doubled tariffs on Indian imports, making them among the steepest for any US trading partner. This move has affected a variety of Indian goods, including garments, jewelry, and shrimp.

Trade negotiations between India and the EU have entered a critical stage, with teams working aggressively to meet a year-end goal for signing a free trade agreement.

The EU is currently India's largest trading partner for goods, with two-way trade reaching $137.5 billion in the fiscal year ending March 2024 - an increase of nearly 90 per cent over the last decade. Indian exporters are intensifying efforts to meet the EU's demanding standards related to chemicals, product labeling, and ethical sourcing, textile executives noted.

Exporters are upgrading their production facilities to comply with these requirements, according to Rahul Mehta, Chief Mentor, Clothing Manufacturers Association of India (CMAI). Mehta also added that exporters are keen to reduce their current dependence on the US market.

The US was India's largest market for textiles and apparel in the fiscal year to March 2025, accounting for almost 29 per cent of total exports, which were valued at roughly $38 billion.

Some exporters have already begun offering discounts to retain US customers, states Vijay Kumar Agarwal, Chairman, Creative Group, whose US exports represent a massive 89 percent of its total shipments.

Agarwal warned, if US tariffs continue to hurt business, the company could be forced to lay off 6,000 to 7,000 of its 15,000 workers. Furthermore, after six months, the company may consider moving production to countries like Oman or Bangladesh.