As India aggressively pursues its vision to grow textile exports from USD 37 billion to USD 100 billion by 2030, the industry has been struck by an unexpected blow — a 25% tariff imposed by the United States, along with potential penal duties. The announcement has sent shockwaves through the Indian textile and apparel export sector, threatening to derail short-term trade momentum.
The Indian government has made significant strides toward this growth goal by securing Free Trade Agreements (FTAs) with countries like Australia, UAE, Mauritius, and recently signing a landmark deal with the United Kingdom. Ongoing talks with the European Union and Bilateral Trade Agreement (BTA) negotiations with the U.S. had further boosted exporter optimism. However, the sudden tariff hike by the U.S. has created a climate of uncertainty.
In a public statement, Dr. S.K. Sundararaman, Chairman of the Southern India Mills’ Association (SIMA), expressed deep concern over the timing and impact of the U.S. decision.
“While the industry was celebrating progress on the India-UK FTA, the sudden tariff announcement by the U.S. is a major setback. With the upcoming festive and summer seasons, this could severely impact order flows,” he stated.
Currently, Indian textile and apparel exports to the U.S. stand at around USD 11 billion, accounting for 30% of India’s total garment exports. The country’s market share in U.S. garment imports has risen from 4.5% in 2020 to 5.8% in 2024, reflecting promising gains — now potentially at risk.
Indian exports already face significant U.S. tariffs:
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Made-ups attract around 9.6% duty
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Readymade garments face duties of up to 16%
While the newly announced 25% tariff may still appear manageable in comparison to duties levied on certain other nations, SIMA warns that the real threat lies in the unspecified penal component, which could escalate costs further and reduce competitiveness.
“The penal provision’s impact may only become evident later. We urge the Hon’ble Prime Minister to raise the matter directly with the U.S. President, seek withdrawal of the penalty clause, and fast-track the bilateral trade talks scheduled for October–November 2025,” Dr. Sundararaman emphasized.
He concluded on a hopeful note, commending the negotiation efforts led by the Hon’ble Prime Minister and the Hon’ble Minister of Commerce and Industry, and expressing confidence that a mutually favorable resolution will be reached soon.
