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.