Textile exporters turn cautious as Trump's 15% tariff wipes off competitive edge

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• Indian apparel exporters cautious amid US trade policy volatility
• US Supreme Court ruling lifts tariffs, boosts Indian textile stocks
• Tariff changes narrow India's edge over China and Bangladesh

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Indian apparel exporters are adopting a "wait-and -watch" stance as the US trade policy enters a period of extreme volatility, following the scrapping of the International Emergency Economic Powers Act (IEEPA).

While a 15 percent flat global tariff is expected to take effect after February 26, down from the current rate of approximately 18 percent, industry players warn that the situation remains too fluid and erratic for long-term planning.

"Businesses can survive tough conditions but very difficult to survive in uncertain conditions. If you talk to any exporter today, the reaction is going to be that we are waiting and watching. The unfortunate thing is where we had thought that there will be some... advantages over some countries may not be so. We will all be on an equal footing," said Rahul Mehta, Chief Mentor, Clothing Manufacturers Association of India (CMAI).

Earlier, India faced tariffs of around 18 percent, compared to Bangladesh at 19 percent and Vietnam at 20 percent, giving Indian exporters a slight edge.

The US accounts for about 28 percent of India’s textile exports, with shipments worth $10.05 billion in FY24. Apparel forms the biggest share, followed by home textiles and made-ups such as bed linen, towels, carpets, curtains and upholstery. India’s total textile and apparel exports stood close to $38 billion in FY25.

Challenges before Indian exporters

With the revised rates, Indian exporters are navigating the challenge of repricing contracts and maintaining a competitive edge against rivals like China and Bangladesh in a market that remains far from bullish.

“There is a level-playing field now, and the relative advantage we had over China and Bangladesh has narrowed. Indian exporters had already lost a portion of the summer orders due to the earlier higher duty, but with tariffs now lower, we expect to secure some of the pending or spillover orders. We are hopeful that winter bookings will show improvement,” an industry source said.

Indian textile stocks rallied on February 23 after the US Supreme Court struck down sweeping import levies imposed by Donald Trump, easing concerns around trade disruptions and lifting sentiment across export-oriented shares. Kitex Garments Ltd stock jumped 5.74 percent to Rs 196.84 on the NSE at 10:54 am on February 23. Trident Ltd rose 4.5 percent to Rs 26.76, while Welspun Living gained 2.68 percent to Rs 140.44.

The US court’s ruling on Friday invalidated tariffs that had been introduced under a national emergency law, a move with significant implications for global trade flows. The levies had raised fears of higher costs and demand disruption in key export markets, including the US -- a crucial destination for Indian apparel and home textile makers.

The sector had been under strain after the US imposed a 50 percent tariff on Indian goods in late August, one of the highest globally, even as trade negotiations were ongoing. In November 2025, US imports of textiles and apparel from India declined by 31.4 percent year on year, according to an analysis by the Confederation of Indian Textile Industry (CITI).