The Ministry of Textiles has welcomed the agreement between India and the United States (US), stating that it is expected to enhance textile trade relations between the two nations. The textile industry has expressed the hope that the agreement will have a significant impact on the sector.
For textile exports, the agreement is expected to open access to a $118 billion US global imports market covering textiles, apparels and made-ups. The US is India’s largest export destination with around $ 10.5 billion exports, comprising around 70% apparel and 15% made-ups, making it a key market for the sector.
The agreement is expected to support India’s intended target of $100 billion exports in 2030, with the US projected to contribute more than 1/5th of this target.
According to the Ministry, the 18% reciprocal tariffs on all textile products, including apparel and made-ups, will remove the disadvantage faced by Indian exporters. It is also expected to place India in a better position compared to competitors such as Bangladesh (20%), China (30%), Pakistan (19%) and Vietnam (20%), which have higher reciprocal tariffs.
The agreement is expected to influence sourcing decisions of large buyers, as market dynamics may shift following the change in tariff structures.
The Ministry stated that the agreement would enable the industry to be cost competitive and diversify risks by sourcing intermediates for the textile sector from the US. This is expected to facilitate manufacturing of value-added textiles in the country and diversify production and exports.
The deal is also expected to generate additional employment and encourage investments by US entities.