US tariff puts Indian textile exporters at disadvantage, industry body says
- The Trump administration imposed 10% and 12.5% duties on goods from 60 trading partners
New U.S. tariffs on Indian goods, citing forced-labor concerns, disadvantage Indian textile exporters against Asian rivals who are exempt, risking significant export losses for India.
- New U.S. tariffs on Indian goods under Section 301.
- India's exclusion from tariff-rate quotas for rivals.
- Estimated $11 billion impact on India's textile exports.
NEW DELHI: Indian textile and apparel exporters will face a disadvantage against Asian rivals under Washington’s new 10% tariff on Indian goods, an industry body said on Friday.
The Trump administration imposed 10% and 12.5% duties on goods from 60 trading partners, alleging inadequate enforcement of forced-labour import prohibitions.
The duty, effective from Friday, applies on top of normal U.S. most-favoured-nation tariffs and covers much of India’s manufactured exports under Section 301 of the U.S. Trade Act of 1974 used to impose the tariffs, the Confederation of Indian Textile Industry (CITI) said.
But India was also excluded from planned tariff-rate quotas allowing specified textile and apparel shipments from Bangladesh, Cambodia, Indonesia and Malaysia using U.S.-origin cotton and fibre to enter the U.S. free of the Section 301 duty.
“The differential treatment risks diverting sourcing orders for textile and apparel items away from India,” CITI Chairman Ashwin Chandran said.
Also read: India rejects US charge of surplus capacity in textiles, steel
India’s textile and apparel exports to the U.S., their largest market, are worth nearly $11 billion annually, CITI said.
Bangladesh exported about $8 billion worth of apparel to the United States in 2024, while Indonesia and Cambodia shipped about $4 billion each. Together with Malaysia, they are eligible for the new textile quota mechanism, giving them an edge over Indian suppliers in the U.S. market, exporters said.
The impact will depend on the share of garments produced using U.S.-origin cotton and fabrics that qualify for the exemption.
Ajay Srivastava, founder of the Global Trade Research Initiative think tank, estimated about 70% of Indian exports to the U.S. - including garments, machinery, chemicals, plastics, leather goods, gems and jewellery and furniture - would face regular duties plus the new levy.
The new tariffs, announced in a Federal Register notice, cover 99.4% of U.S. imports, but include numerous product exemptions, such as oil and gas, fertiliser and certain food items.
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