Experts: Trump tariffs may hurt Indian textiles

New Delhi

US President Donald Trump's move to impose a 25% additional import duty and an unspecified penalty on Indian goods from August 1 is expected to severely affect India’s textile exports, experts warned on Thursday. The penalty, linked to India’s oil and defense trade with Russia, adds uncertainty for exporters.

The US is India's top market for textiles and apparel, with around $5.6 billion worth of ready-made garments exported there annually. Experts at Cybex Exim Solutions said the new tariffs could lead to order cancellations and price pressures, as competitors like Vietnam and Indonesia benefit from lower tariffs—20% and 19%, respectively.

Though India still has a quality advantage over countries like Bangladesh and Cambodia, the increased costs may hit smaller exporters the hardest. Experts stressed the need for Indian exporters to diversify by exploring markets like the UK, EU, UAE, Japan, and Korea.

Chandrima Chatterjee, Secretary General of the Confederation of Indian Textile Industry (CITI), expressed serious concern over the unspecified penalty, noting the uncertainty it creates for exporters preparing shipments for the next few months.

Rajeev Gupta, Joint Managing Director of RSWM Ltd, echoed these concerns and highlighted the lack of clarity around the penalty clause. He called for more transparency, particularly regarding US tariffs on Chinese goods. However, he remained optimistic, saying Indian entrepreneurs are resilient and can adapt through strategic planning.

Overall, experts agree the tariff hike poses a major challenge but also presents an opportunity for Indian exporters to rethink and diversify their global outreach.