India’s Apparel Exporters Seek Government Relief as U.S. Tariffs Hurt Competitiveness

Indian Apparel Exporters Latest News

• Domestic apparel exporters have raised serious concerns over the United States’ decision to impose a 25 per cent tariff on Indian textile and apparel products.
• This rate is significantly higher than that imposed on key competitors like Bangladesh (20%), Vietnam (20%), Indonesia (19%), and Cambodia (19%). 
• The new tariffs, set to take effect from August 7, have left Indian exporters at a severe disadvantage in their largest export market.

Indian Apparel Exporters Seek Urgent Government Support

• With the U.S. imposing a steep 25% tariff on Indian apparel, Indian textile and apparel exporters have raised alarm over their diminishing competitiveness in the U.S. market. 
• The new tariffs are expected to severely impact India’s export margins, forcing manufacturers to sell below cost to sustain operations and avoid mass layoffs. 
• Industry experts have called for immediate government intervention to offset this setback. 
• They warned that the duty disadvantage will further compound existing challenges faced by Indian exporters. 
• They urged the government to ensure easier access to raw materials and support measures to mitigate the adverse impact of these tariffs on India’s textile and apparel sector.

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India’s Apparel Market Share in U.S. on the Rise Despite Challenges

• While China remains the largest exporter of textiles and apparel to the U.S., its market share has declined from 27.4% in 2020 to 21.9% in 2024. 
• In contrast, India’s share in the U.S. garment import market has grown from 4.5% to 5.8% during the same period. 
• The U.S. is a crucial market for India’s Ready-Made Garments (RMG), accounting for 33% of India’s total garment exports in 2024. 
• India currently ranks as the fourth-largest RMG exporter to the U.S. Among India’s top exports to the U.S. are cotton T-shirts (9.71% share), women’s or girls’ cotton dresses (6.52%), and babies’ cotton garments (5.46%). 
• These products command a significant share in the U.S.’s total imports of these items globally, reflecting India’s steadily growing footprint in a competitive market.

Government Measures to Boost Textile Exports

• India’s textile and handicrafts exports grew by 5% in FY25, reaching $37.7 billion compared to $35.8 billion in the previous fiscal year, according to the Ministry of Textiles. 
• To further strengthen the sector, the government is implementing the Scheme for Integrated Textile Park (SITP) to develop world-class infrastructure in textile hubs across the country. 
• Additionally, the government has finalized the establishment of seven PM Mega Integrated Textile Region and Apparel (PM-MITRA) parks in Tamil Nadu, Telangana, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh, and Maharashtra. 
• These parks, with a total outlay of ₹4,445 crore, aim to enhance India’s textile manufacturing ecosystem over the next seven years, up to 2027-28.

India-U.S. Trade Talks Stalled Over Agriculture and GM Crop Imports

• India-U.S. trade negotiations are facing a deadlock over sensitive sectors like agriculture and automobiles, with discussions expected to resume after mid-August. 
• A major sticking point is the U.S. demand for India to allow imports of genetically modified (GM) agricultural products such as corn and soya, which India is unlikely to accept. 
• Agriculture has long been a contentious issue in bilateral trade relations, with the United States Trade Representative (USTR) previously criticizing restrictions on GM products by other countries as discriminatory. 
• This ongoing impasse continues to hinder progress on a broader trade agreement.

Source: IE