Domestic textile players saw their shares rally over eight percent in the morning session on Tuesday, July 8, after U.S. imposed sweeping tariffs of 35 percent on Bangladesh.
With the imposition of such high tariffs on Bangaladesh, locally manufactured textile exports become more competitive in comparison in global markets.
At 9.25 a.m., shares of Gokaldas Exports were up 7.8 percent at Rs 970, KPR Mill shares were higher by two percent, quoting Rs 1,181.3, Vardhman Textiles shares rallied 7.4 percent to Rs 535.75 and Welspun Living's stock jumped two percent to Rs 145.65 apiece. Further, counters like Alok Industries and Raymond also recorded impressive gains on the bourses.
In the U.S. ready-made garment market, Vietnam holds a 19 percent share, while Bangladesh accounts for 9 percent and India follows with 6 percent.
While the announced tariff on Bangladesh has been slightly reduced from the 37 percent rate declared in April, it remains significantly above the base rate of 10 percent. Negotiations are still possible until the new tariffs take effect on August 1.
On India, U.S. President Donald Trump said a trade deal is close as he announced tariffs for 14 other countries, most of them in Asia.
"...We are close to making a deal with India. We've made a deal with the United Kingdom. We've made a deal with China. Others we met with, and we don't think we're going to be able to make a deal, so we just send them a letter. We're sending out letters to various countries telling them how much tariffs they have to pay. Some will maybe adjust a little bit depending if they have a cause, we're not going to be unfair about it..."
Trump imposed 25 percent tariffs on goods from Japan and South Korea, while 12 other nations received letters revealing the duties they will have to pay. Further, his letters revealed that goods from Myanmar and Laos will be taxed at a flat rate of 40 percent, while Cambodia and Thailand will see a rate of 36 percent.
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