US tariffs: 25% of India's textile exports to be hit over next month; here is what experts say

India’s textile exporters may be bracing for a major blow as the United States’ steep 50% tariffs come into force, with experts warning that nearly one-fourth of the country’s textile exports could be hit over the next six months.

America is the largest market for Indian apparel, and order cancellations have already begun troubling exporters.

The government’s move to extend duty-free cotton imports until 31 December is likely to provide some much-needed relief. The relief is aimed at helping the domestic textile industry cope with the new tariff pressure by cutting input costs and encouraging exporters to re-orient strategies and explore markets beyond the US, using India’s existing free trade agreements (FTAs).

"We are looking at a hit of at least 20-25% for the next six months, if I am considering some amount of re-orientation to be done because otherwise the figure is 28% of exports, largely apparel and made-ups," Confederation of Indian Textile Industry (CITI) Secretary General Chandrima Chatterjee told PTI.

The government on Thursday announced the extension of the cotton duty exemption, first introduced on 19 August and originally valid until 30 September.

"We are very relieved because the earlier exemption was not benefiting new orders that can be placed for cotton as it takes a minimum 45-50 days to be shipped. So now this relatively longer widow will benefit the new orders," Chatterjee said.

She explained that the exemption will help Indian exporters remain cost-competitive. "Prior to these exemptions the difference between the domestic cotton price and the international bench-mark was 10-15%, that will be addressed," she added.

The industry has also raised the issue directly with the government. Apparel Export Promotion Council (AEPC) chairman Sudhir Sekhri, in his letter to PM Narendra Modi, called the 50% reciprocal tariff by the US a matter of deep concern for the country's textile and apparel industry.

"The United States is one of the largest export destinations, and such a steep tariff will severely impact the competitiveness of Indian products in the American market, hurting both exporters and consumers," Sekhri told PTI.

While expressing support for the government’s stance on protecting Indian farmers, the dairy industry and fishermen, Sekhri acknowledged the immediate challenges.

"Our industry is already experiencing the effects of the tariff hike, with potential losses and order cancellations. We are exploring alternate markets and strategies to mitigate the impact of the US tariffs. We are also in active discussions with the Ministry of Textiles and Ministry of Commerce & Industry. In our meetings with the ministers of both the ministries, we have been assured of their best possible support," PTI quoted Sekhri.

India’s textile and apparel sector is currently valued at $179 billion in 2024-25, with the domestic market accounting for $142 billion and exports worth $37 billion.