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Amid rising concerns by businesses about the impact of the 25 per cent reciprocal tariff by the US, the Ministry of Textiles has called a meeting with major textile and apparel exporters from across the country here today. The meeting, to be chaired by Union Textiles Minister Giriraj Singh, has been called to discuss the challenges being faced by exporters in their order flows, especially amid the widening tariff differentials with other competing Asian countries after the recent imposition of secondary tatiffs by the US on India.
With the US being India’s largest export market for the labour-intensive textile and apparel industry, textile exporters are under stress after the hike in import tariff to 25 per cent from August 7 by the Trump administration, which is set to rise further to 50 per cent on August 27. Textile and apparel exporters have been asking for support from the government as their orders have been hit with buyers either asking them to share the tariff hike burden or pausing the orders till further clarity emerges about the trade deal negotiations between India and the US.
One of the major concerns raised by textile and apparel exporters in their representations to the government has been about a disruption in their cash flow with a reduction in orders by buyers from the US, officials said. “Exporters are asking for sops. They are asking for soft loans or interest subvention schemes or focused market schemes. Their concern is that they should get cash in hand,” an official told The Indian Express.
Exporters are hoping that the tariff hike is temporary and they are able to retain the orders as buyers are already shifting to other countries with lower tariffs such as Vietnam and Bangladesh, with India’s 25 per cent reciprocal tariff exceeding those applicable to other competing Asian countries, except China. If the higher levies continue, there’s also a worry in policy circles that the distress in the textiles and apparels sector could result in job losses.
The government is engaging continuously with exporters to understand the evolving situation. “Exporters have been communicating their issues. The government is taking their feedback and will provide the necessary support to them,” another official said.
The Ministry of Finance has estimated that more than half of the country’s merchandise exports to the US will be subject to the higher reciprocal tariff. The US is a key market for Indian Ready-Made Garments (RMG) exports; its share in India’s total garment exports in 2024 stood at 33 per cent, as per the Apparel Export Promotion Council (AEPC). Home textiles and carpets are also significant export-oriented sectors, with exports accounting for 70-75 per cent and 65-70 per cent of total sales, respectively, for these sectors. Of this, the US accounts for 60 per cent of exports for home textiles and 50 per cent of exports for carpets.
US President Donald Trump had announced a 25 per cent tariff on Indian goods in a post on social media platform Truth Social on July 30, with an additional but unspecified “penalty” for importing energy and defence items from Russia. On August 6, the penalty was clarified to be an additional 25 per cent tariff that will be effective from August 27.
