India’s textile exports to the U.S. are currently subject to a 26% tariff. In comparison, other key textile-exporting nations face different tariff rates:
- Vietnam: 46%
- Bangladesh: 37%
- Cambodia: 49%
- European Union: 20%
- China: 34%
- Pakistan: 29%
India’s tariff rate is lower than that of Vietnam, Bangladesh, Cambodia, China, and Pakistan but remains higher than the European Union’s.
Impact on India’s Textile Sector
In the short term, the global textile market is expected to experience a slowdown as U.S. buyers reduce new orders and utilize existing inventory in anticipation of possible tariff renegotiations.
However, if the current tariff structure persists, the U.S. will need to continue sourcing apparel. Given that India’s tariff rate is comparatively lower than most other major textile-exporting nations (except the EU), India could emerge as a preferred sourcing destination for textiles and clothing.
The likelihood of the U.S. establishing domestic textile and clothing manufacturing capacity remains low due to labor-intensive requirements and market uncertainties. The current tariff policies appear to be driven more by trade deficit concerns rather than a reciprocal tariff structure. As the situation evolves, stakeholders will need to closely monitor developments and adjust strategies accordingly.