New U.S. Tariffs Hit Indian Textile Industry Hard

The U.S. has imposed a new 10% tariff on Indian goods, which is expected to disadvantage Indian textile and apparel exporters compared to competitors from other Asian countries. The U.S. has excluded India from tariff-rate quotas that benefit other countries like Bangladesh and Malaysia, further impacting the Indian textile sector.

The U.S. administration has announced a new 10% tariff on Indian goods, significantly impacting the nation's textile and apparel exports. An industry body revealed that this move places Indian exporters at a competitive disadvantage compared to their Asian counterparts.

These tariffs result from alleged inadequate enforcement of forced-labor import prohibitions and add another layer of cost on top of existing U.S. tariffs. India's exclusion from planned tariff-rate quotas further strengthens the competitive position of countries like Bangladesh, Cambodia, Indonesia, and Malaysia.

Annually, India exports nearly $11 billion worth of textiles and apparel to the U.S., its largest market. However, the differential treatment of tariffs could divert sourcing orders away from Indian exporters, as noted by CITI Chairman Ashwin Chandran. The long-term impact hinges on share of garments using U.S.-origin cotton and fabrics qualifying for exemptions.