Indian Textile Industry's Management Model Response to US Tariffs

Fashion Value Chain

02-05-2025

Ms. Ananya Tiwari, Post-Graduate Academic Scholar in Fashion Management, National Institute of Fashion Technology, Ministry of Textiles, Daman campus
Dr Vidhu Sekhar P, Assistant Professor, Department of Fashion Management Studies, National Institute of Fashion Technology, Ministry of Textiles, Daman campus
Abstract
With the impending 2025 U.S. tariffs changing the dynamics of international trade, the Indian textile sector is once again in the news. To protect their companies, 3 significant Indian textile companies—Welspun Living, Gokaldas Exports, and Faze Three—are acting proactively and dynamically.
This article examines the practical applications of textbook management models, such as Porter's Five Forces, Ansoff Matrix, and Risk Management, by these companies. This case provides a unique real-time illustration of operational resilience and strategic agility for management students. It sheds light on how companies apply theoretical frameworks to turn outside threats into expansion prospects.
Keywords
Strategic Management, Indian Textile Industry, Porter's Five Forces, Ansoff Matrix, Risk Mitigation, Global Trade, Textile Exports, Business Strategy.
Introduction
The fortunes of the textile industry have always been significantly influenced by global trade policies. Indian textile exporters face a more complicated environment as the United States increases tariffs in 2025. As a result, businesses are showing how fundamental management concepts, which are usually taught in business schools, have real-world applications. This article demonstrates how strategic models and frameworks can be useful tools for success and survival using the examples of five top businesses.
Application of Porter's Five Forces
Understanding the competitive forces operating within an industry is made easier with the aid of Michael Porter's Five Forces model. This model is being strategically used by Indian textile companies to reconsider their stances and lessen pressure.
For example, by purchasing BRFL Textiles, Gokaldas Exports addressed supplier power, a significant issue in manufacturing. They have direct control over material inputs thanks to vertical integration, which guarantees stability in both cost and quality. Similarly, by setting up a manufacturing facility in the United States, Welspun Living diminished the purchasing power of consumers. Welspun improves margins by negotiating directly with major U.S. retailers and avoiding traditional importers by relocating closer to its major markets.
Furthermore, by concentrating on the niche home textiles market, Faze Three has set itself apart and successfully reduced the threat of substitutes. Premium and specialized products encourage brand loyalty and lessen the likelihood that customers will switch.
The following table neatly summarizes the strategic responses mapped to Porter's Five Forces:
Company Strategic Move Porter's Force Addressed
Gokaldas Exports
Investment in BRFL Textiles (fabric sourcing)
Lower supplier power
Welspun Living
U.S. manufacturing unit
Lower buyer power
Faze Three
Focus on niche home textiles
Lower substitute threat
These examples show how a theoretical framework can help direct how businesses react to outside market forces.
Application of Ansoff Matrix Strategies
Another traditional framework that aids businesses in choosing between diversification, product development, market expansion, and market penetration is the Ansoff Matrix. These tactics are being used selectively by Indian textile exporters according to their market opportunities and competitive advantages.
By entering new geographic markets like the U.S. and Europe, Indo Count and K.P.R. Mill are utilizing market development strategies. Their objective is to present current product lines—mainly clothing and bed linens—to new markets.
Faze Three, meanwhile, is notable for its approach to product development. In a crowded market, it maintains the novelty and appeal of its product offerings by concentrating on cutting-edge home textile solutions, such as sustainable and functional fabrics.
Welspun Living uses related diversification to combine strategies. By introducing complementary goods like pillows, it maximizes cross-selling opportunities while simultaneously strengthening its current market presence and catering to new consumer demands.
This strategic mapping can be observed here:
Growth Strategy Company Action
Market Development
Indo Count, K.P.R. Mill
Expand in U.S. and Europe
Product Development
Faze Three
Innovate niche textiles
Related Diversification
Welspun Living
New products (pillows) in new geographies
These businesses show an organized approach to growth in the face of uncertainty by adhering to Ansoff's guidelines.
Focus on Risk Management
With growing geopolitical tensions and protectionist policies, risk management has become a key component of textile companies' strategies. To protect their operations, businesses are identifying critical risks and constructing tactical hedges.
An excellent illustration of operational risk mitigation is Welspun Living's decision to build a factory in the United States. The company safeguards itself against future tariff shocks and logistical disruptions by manufacturing within the borders of the United States.
In order to improve its financial stability and withstand economic shocks, credit tightening, and rising interest rates, the company has simultaneously proactively concentrated on debt reduction.
Gokaldas Exports is using vertical integration to reduce supply chain risks. By protecting its raw material sources, Gokaldas lessens its dependency on erratic outside vendors, guaranteeing availability and cost containment.
The actions of these firms in response to risk factors can be captured as follows:
External Factor Company Strategic Response
US Tariffs
Welspun Living
Set up a U.S. factory to mitigate trade barriers
Reduced debt to strengthen financial stability
Gokaldas Exports
Secured supply chain through vertical integration
Even in the face of difficult macroeconomic circumstances, these risk responses guarantee long-term survival and establish a sustainable competitive advantage.
Conclusion
The significance of strategic thinking based on academic models is demonstrated by the example of Indian textile companies getting ready for the 2025 U.S. tariffs. Businesses are demonstrating incredible agility and foresight through the practical application of the Ansoff Matrix, Porter's Five Forces, and risk management techniques.
These examples provide real-world case studies of how theoretical knowledge must change to meet changing real-world business challenges for management students and aspiring industry leaders. In today's unstable global marketplace, the capacity to foresee, innovate, and manage risk is not only a competitive advantage but also a need.
As a result, the Indian textile industry, which is frequently thought of as traditional and labour-intensive, is becoming a dynamic arena for contemporary strategic management techniques.
References