US tariff reset puts India in pole position in global textile trade

The agreement creates immense opportunities across the entire textiles value chain and is expected to generate substantial employment, particularly for the women and MSMEs | Photo Credit: AMIT DAVE

The US interim framework is a great moment for the textile industry, said A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC). “This decade will undoubtedly usher in a golden era for the Indian textile and apparel sector,” he added.

A similar sentiment was expressed by other industry officials.

With an 18 per cent tariff, India will have a competitive edge over major exporting nations such as China (35 per cent), Vietnam (20 per cent), Bangladesh (20 per cent) and Indonesia (19 per cent).

The coming decade is poised to be India’s decade in textile trade, as the country emerges as one of the most preferred sourcing destinations for global buyers, said Sakthivel.

The agreement represents a historic milestone for India’s textiles and apparel sector. It creates immense opportunities across the entire textiles value chain and is expected to generate substantial employment, particularly for the women and MSMEs. Farmers in rural India will also benefit significantly, reinforcing inclusive and sustainable growth.

The tariff eliminations and enhanced market access arising from this agreement will greatly strengthen the global competitiveness of the Indian textiles and apparel sector, firmly establishing India as the most reliable and trusted sourcing hub worldwide.

This will also address the issue of non-tariff barriers to trade and reduce the compliance burden and procedural delays leading to the faster movement of goods to the US market, he said.

The main beneficiaries will be Indian exports of textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home décor and artisanal products, and certain categories of machinery, said Global Trade Research Initiative.

“The earlier 50 per cent US tariff on Indian goods was the biggest pain point for the Indian textile and apparel sector, which counts the United States as its single-biggest overseas market. With that gone, India’s textile and apparel exports can once again compete effectively in the US, as at 18 per cent we will now also enjoy a slight tariff advantage over our nearest competitors, Vietnam and Bangladesh,” CITI Chairman Ashwin Chandran said.

“This highly positive development is a huge boost for India’s aim of textiles and apparel exports worth $100 billion by 2030,” he added.

The CITI Chairman said the industry body is awaiting more clarity on cotton. There is great complementarity between the US and India on cotton. India’s exports of textiles and apparel are primarily driven by cotton, he added.

The removal of import duty on cotton of all varieties will reduce the divergence between domestic and global prices and help restore the competitiveness of India’s spinning and textile industries. Such a step would also ensure that the minimum support price (MSP) and other farmer-support mechanisms can function as intended without creating significant downstream price distortions. During the current cotton season, the MSP of ‘Kapas’ has increased by nearly 8 per cent, he said.

Coming quickly on the back of the India - EU FTA and with 20 plus other trade agreements with large economies/ trading blocks, this puts India in the pole position in the race to China +1 opportunity in global supply chains, said Nitin Jain, CEO and Director, Kotak Mahindra Asset Mahindra Singapore.

Published on February 7, 2026