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Fibre2Fashion
07-08-2025
- Business
- Fibre2Fashion
India's textile industry sees opportunity despite $2 bn blow
Following the announcement of an additional 25 per cent tariff by the US on Indian goods, including textiles and apparel, the total duty—when combined with regular tariffs—is now exceeding 60 per cent. While this sharp escalation poses a significant challenge, industry leaders and the government have expressed confidence in turning the turmoil into an opportunity to restructure and redefine the sector. However, there is growing concern over existing stock in the pipeline, estimated at $2–2.5 billion, which may now be stuck due to the sudden tariff hike. Tension is mounting across the textile value chain, with stakeholders alarmed by the uncertainty and commercial unviability of the new US tariff regime. Industry sources revealed that exporters have begun holding back current garment and textile export orders from US buyers, fearing they will not be able to dispatch consignments within the permissible window for clearance at US ports under the earlier tariff rates. With limited scope to absorb the additional tariff burden, both buyers and sellers are now at a standstill. India's textile and apparel sector faces a major setback after the US imposed an additional 25 per cent tariff, raising total duties to over 60 per cent. With $2â€'2.5 billion worth of stock at risk, exporters fear losses and order cancellations. While the short-term impact is severe, some industry leaders see an opportunity for market diversification and long-term structural reform. Sanjay K Jain, chairman of the ICC National Textiles Committee and managing director of TT Ltd, told Fibre2Fashion , 'If we assume average monthly garment and textile exports to the US at $800 million, stocks worth nearly $2 billion are stuck due to the unreasonably high tariffs on Indian goods.' He raised several critical questions for the consideration of the industry, the Indian government, and the country at large. Jain emphasised that the industry needs immediate cash incentives to mitigate the impact of the US tariff hikes. While the Indian government is attempting to support the industry during this difficult period, it is reportedly unwilling to provide country-specific incentives—which are crucial in the current scenario. He pointed out that China had faced similar challenges and had responded with immediate relief for its industry. The country also succeeded in negotiating a comfortable interim trade agreement. Jain further raised these concerns in a LinkedIn post, arguing that the government is saving substantially from cheaper Russian crude oil and should use those savings to provide incentives to the industry. Jasveen Kaur, senior director of merchandising for garment sourcing at New Times Group, told F2F , 'From where we stand, I believe that the US and India will eventually find a resolution—and the current 21-day window is a strong indicator that dialogue and diplomacy are in motion. However, in the interim, we must act decisively and strategically.' She acknowledged that if the proposed 50 per cent tariff becomes a long-term reality, it could affect 45–50 million people directly or indirectly employed in the sector. In the short term, no alternative market can fully compensate for the volume and value currently offered by the US. The void will be felt across the supply chain, as India's textile and apparel sector is deeply intertwined with the US market, which accounts for a significant share of exports. Despite the challenges, she expressed a sense of optimism. 'We have Free Trade Agreements with Japan, the UAE, the UK, and Australia—offering promising avenues for expansion. Strengthening our presence in these markets will not only mitigate risk but also unlock new growth opportunities,' she said. 'While the tariff is undoubtedly disruptive, it also serves as a wake-up call. We must build resilience by diversifying our market exposure.' Commenting on current export orders, Kaur said exporters will attempt to accelerate production for early shipment and may resort to airlifting goods to ensure delivery before the tariff hike takes effect. However, new orders may be diverted to competing countries such as Bangladesh, Vietnam, and others—posing a significant loss for Indian exporters. Santosh Katariya, president of the Clothing Manufacturers Association of India (CMAI) , said, 'The imposition of an additional 25 per cent tariff on India will deliver a crippling blow to the Indian apparel industry. The proposed hike will make Indian apparel costlier by 30–35 per cent compared to alternatives from countries like Bangladesh and Vietnam, rendering Indian exports uncompetitive in the global market. Buyers are unlikely to absorb such a substantial pricing gap, which could lead to a sharp decline in export orders.' He termed the move as "unjustified, unfair, and arbitrary." Rahul Mehta, chief mentor of CMAI , stated, 'While we continue to hope that this development is part of a broader negotiation strategy, we strongly recommend that both the government and the industry collaborate urgently to devise measures that can mitigate the adverse impact of this draconian levy.' CMAI anticipates that the coming months will be extremely challenging for the Indian apparel export sector and is calling for strategic intervention to safeguard the industry's long-term viability. Fibre2Fashion News Desk (KUL)
Yahoo
07-08-2025
- Business
- Yahoo
Will India's Strength Be Sapped by 25 Percent Tariff?
'Still, a shock,' Indian manufacturers told Sourcing Journal, as the impact of the 25 percent U.S. tariff on Indian exports rippled through markets. The tariff, announced by President Trump on Truth Social on Wednesday, came just as India was being seen as an increasingly vital sourcing destination. Over the past few months, India had begun positioning itself for a larger role in global apparel exports, especially as other sourcing nations in Asia were hit with steep U.S. tariffs announced in April: at the time, Vietnam at 46 percent, Cambodia at 47 percent, Sri Lanka at 44 percent, and Bangladesh at 37 percent. More from Sourcing Journal Trump Announces Dozens of New Reciprocal Tariff Rates Trump Tariffs Face Sharp Scrutiny in Appeals Court Global Air Cargo Growth Stalls as Tariffs Hammer North American Airlines Indian manufacturers had begun drawing up aggressive growth plans, factoring in the newly unfavorable environment for their competitors. But since then, the playing field has shifted. Vietnam's tariff was negotiated down to 20 percent earlier this month, Indonesia's to 19 percent, and Bangladesh to 35 percent and Sri Lanka's to 30 percent. India's tariff, in contrast, was reduced by just one percentage point—from 26 to 25 percent. 'It's not good news,' said Sanjay K. Jain, chair of the ICC National Textiles Committee. 'Suddenly everyone feels it is a disaster for India. But is it so bad? India, in any case, doesn't have the capacity for more than 10 percent growth at the moment. Capacity is being built, driven by U.K demand and other buyers who have already committed to India.' He said that a tariff of less than 20 percent had not been expected anyway. 'So, yes, it's a five percent hit—maybe the bullish sentiment is gone, but we're not bearish either. India is still in a strong position and normal apparel growth will continue.' Among his recommendation to help the industry, and reduce the pain—is to remove the 11 percent import duty on U.S. cotton, which would immediately boost competitiveness. 'If the U.S. cotton duty is removed, prices will be more attractive, benefiting exports of value-added garments and home textiles. This would help offset the tariff impact,' he said. Exporters and analysts are urging patience, noting that political posturing remains in play, and upcoming diplomatic engagements—including the scheduled U.S. delegation visit to India in August—could reopen negotiations. However, concern grew after President Trump also mentioned additional trade penalties tied to India's energy purchases from Russia. Trump's comment that 'India was a dead economy' was met with sharp criticism, too. India's economy grew by over 6.5 percent in 2024, compared to U.S. GDP growth of 2.8 percent. Speaking in Parliament on Thursday, commerce Minister Piyush Goyal reaffirmed that India's interests would be safeguarded and highlighted the country's status as the world's fastest-growing major economy, on track to becoming the third-largest in terms of GDP. 'The government is assessing the impact of these new tariffs, which come in addition to the 10 percent baseline duty imposed since April,' he said. He also spoke about the fact that negotiations were still on, with five rounds of physical discussions, and more in virtual meetings already taking the agreement on the Bilateral Trade Agreement (BTA) with the U.S and India towards a more balanced negotiation. 'The terms of reference were finalized in March, and we're working towards a mutually beneficial trade pact,' he said, while emphasizing that India would 'take all necessary steps to protect national interests.' He praised the contributions of Indian farmers, small businesses, and industry leaders, reaffirming that their interests would be protected in all upcoming trade decisions. Industry players, meanwhile, expressed surprise that India hadn't secured a better deal, citing possible repercussions on employment and small businesses. 'The U.S. is a key market for Indian apparel exports. In 2024, 33 percent of India's apparel exports went to the U.S.,' said Sudhir Sekhri, chairman of the Apparel Export Promotion Council (AEPC). 'India's share in the U.S. apparel import market has grown from 4.5 percent in 2020 to 5.8 percent in 2024, ranking fourth among major exporters.' According to AEPC, India's top apparel exports to the U.S. include cotton T-shirts (9.71 percent), women's or girls' cotton dresses (6.52 percent), and babies' cotton garments (5.46 percent). These three categories account for 10 percent, 36 percent, and 20 percent of total U.S. imports of these products globally. 'The 25 percent tariff is higher than expected, but it's manageable as long as Vietnam and Bangladesh don't see further tariff reductions,' Sekhri added. 'Exports may slow until an interim Bilateral Trade Agreement (BTA), hopefully concluded between October and December 2025. The penalty clause is a grey area—we expect the government to address this before August 1.' The added penalty clause—linked to India's military and energy ties with Russia—has raised fresh concerns over the $190 billion bilateral trade relationship, which includes a $45 billion deficit on India's side. 'Remember, while India is our friend, we've done relatively little business with them because their tariffs are among the highest in the world,' Trump posted on Truth Social. 'They also impose the most strenuous and obnoxious non-monetary trade barriers. India buys most of its military gear from Russia and is one of Russia's largest energy customers. These are not good things. Starting August 1, India will pay a 25 percent tariff—plus a penalty.' Rahul Mehta, Chief Mentor of the Clothing Manufacturers Association of India (CMAI), called the 25 percent tariff a 'surprising twist.' 'If these terms are implemented, Indian products will be 7–10 percent more expensive than some competitors. That will hurt apparel exports to the U.S. Fortunately, we've just signed a free trade agreement with the UK, and the one with the EU is progressing quickly,' he said. Final tariff numbers for other sourcing countries are still awaited. Negotiations for Bangladesh have been on this week, with manufacturers in Dhaka telling Sourcing Journal that they 'expect a drop to under 18 percent.' That's being closely watched, as Bangladesh remains one of the largest apparel exporters after China and manufacturers in India observed wryly that retailers and big brands are 'usually poised to shift sourcing to the lowest-cost locations', and more so, as global production costs rise. Market volatility remains a top concern. 'The lack of clarity on the penalty amount adds to the uncertainty,' said Rakesh Mehra, chairman of the Confederation of Indian Textile Industry (CITI). Others pointed towards the silver lining, that despite everything, India still holds a price advantage over Bangladesh, Sri Lanka, and Cambodia, based on the numbers so far. They also felt that the many opaque terms of agreement made in the deals struck with other countries were also best avoided. Analysts have noted the same. 'A deal may still emerge, but only on fair terms,' think tank Global Trade Research Initiative (GTRI) noted. 'India's principled stand has helped it avoid a one-sided agreement. That itself is a win.' GTRI added that some of the deals with Vietnam and Japan showed 'contradictions in understanding' on both sides. Others pointed out that India's vertical integration from fiber to finished garment, and the country's relative political and economic stability compared to others in the region, would still stand it in good stead as a strong sourcing country, All eyes are now on what happens next. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fibre2Fashion
31-07-2025
- Business
- Fibre2Fashion
India's textile & apparel sector stays confident despite 25% US tariff
Despite the announcement of a 25 per cent US tariff and additional penalties, India's textile and apparel (T&A) industry remains optimistic and confident of maintaining its foothold in the US market under challenging conditions. Industry leaders are banking on India's unmatched quality, production scale, and reliability to retain market share. The recent free trade agreement (FTA) with the United Kingdom is also expected to help offset any potential losses in the US market. However, the industry has put forward two key suggestions to mitigate tariff pressures. Sanjay K Jain, chairman of the ICC National Expert Committee on Textiles and managing director of T T Limited, told Fibre2Fashion , 'Although a 25 per cent US tariff on Indian exports is not good, it is still manageable. When we compare this rate with the tariffs imposed on the US' other major textile suppliers—China and Bangladesh, at 30 per cent [55 per cent overall] and 35 per cent respectively—we are in a relatively better position. That said, Indonesia and Vietnam could pose tougher competition, as they will be subjected to lower tariff rates.' Despite the newly imposed 25 per cent US tariff and penalty, India's textile and apparel industry remains confident, citing its quality, scale, and resilience. Industry leaders stress the need to remove the 11 per cent duty on US cotton and recommend export incentives. The UK FTA and progress in EU negotiations offer alternative opportunities. Competition from Vietnam and Indonesia remains a concern. 'I do not expect India's textile and apparel exports to the US to go down as we are still in a better position than China and Bangladesh. US tariffs is just a loss of prospects of lower duty, but we will be at par, and it is nothing to be happy or disappointed about. The recent FTA with the UK will also open another door for Indian exports. India is also negotiating with the Europea Union (EU) for an FTA. The EU is looking to reduce its dependence on Bangladesh and the buyers' 'China Plus One' policy is also favourable for us,' he added. Jain further suggested removing the 11 per cent import duty on US cotton and incentivising Indian exports to the US by allocating funds from savings on the Russian oil import bill. Removing the duty would enhance the competitiveness of Indian products in the US market, while export incentives could support sector-wide growth. Rahul Mehta, chief mentor, Clothing Manufacturers Association of India commented, 'Whilst the announced levy of 25 per cent does come into effect, it would indeed be a surprising twist to our expectations on the way the trade talks were proceeding. However, having seen the several about turns on the tariff front in the case of other countries, I would not press panic buttons right now. But, if the proposed terms do come into effect, it will make our products 7 to 10 per cent more expensive than some of our competitors, and it will certainly hurt our apparel exports to the US. Fortunately, this set-back has come at the time when we have just signed an FTA with UK and are proceeding rapidly with an FTA with EU. So yes, it is tough times, but not beyond our ability to face.' Dr. Mukesh Kansal, chairman, CTA Apparels, said, 'US President Donald Trump's decision to impose a 25 per cent tariff along with penalties may challenge India's price advantage and shift competitiveness toward nations with preferential trade agreements. However, India's true strength is not limited to cost—it lies in our unmatched quality, scale, and reliability. While this move may create short-term margin pressures, it will ultimately compel Indian manufacturers to innovate, diversify, and solidify their leadership in the global marketplace.' Fibre2Fashion News Desk (KUL)
Fibre2Fashion
26-07-2025
- Business
- Fibre2Fashion
With CETA signed, Indian garment industry expects a boost in exports
Indian textile and apparel industry is expecting that its share will increase in the United Kingdom once the Comprehensive Economic and Trade Agreement (CETA) comes into force. Under the CETA, signed on Thursday in London, India's garment and textile exports will get duty free access to the UK, as it is considered a labour-intensive sector. As of now, India's neighbouring nations like Bangladesh, Pakistan, Cambodia and Myanmar have preferential access to UK's market and their garments are treated duty free at ports. With the signing of the agreement, Indian textile and apparel products will be better able to compete with other countries like Bangladesh and China. Indian textile and apparel items presently face 8-16 per cent duty on various products. Hence, industry stakeholders now want the CETA to be operational at the earliest possible date. India's textile and apparel industry anticipates a surge in exports to the UK as the Comprehensive Economic and Trade Agreement ensures duty-free access. This levels the playing field with nations like Bangladesh and Vietnam. Industry leaders expect India's market share to nearly double, with rising demand for both traditional and sustainable products. Sanjay K Jain, Chairman ICC National Textiles Committee and Managing Director, TT Ltd told Fibre2Fashion, 'The trade deal will boost India's market share from current 5-6 per cent to 10 per cent in the next two years. India and the UK are very close since long, and there is no language barrier. Therefore, the agreement will give great benefit to the Indian textile and garment industry.' Jai Krishna Pathan, President of Mumbai Yarn Merchant Association said, 'Due to the agreement, some amount of garment production is likely to shift to India from Bangladesh. However, upstream textile products like fabric and yarn may not see such huge benefit. But, if garment exports to the UK increases, fabric and yarn industry will get indirect support.' RK Vij, emeritus President of the Textile Association of India (TAI) and Secretary General of Polyester and Apparel Industry Association (PTAIA) commented, 'The long pending agreement is a new chapter for the entire value-added textile chain. Indian Garment and home textile industry may get boost in the UK's market. The agreement is likely to boost investment under government schemes like PM MITRA and PLI scheme as the industry will plan for expansion to tap new opportunities. The arrangement should come into effect at earliest possible.' Santosh Katariya, President, Clothing Manufacturers Association of India stated that the agreement opens up a significant opportunity for the export sector. Given the large Indian diaspora in the UK, it will also boost domestic manufacturers of Indian ethnic apparel to venture into exports. "Since imports of apparel from the UK are likely to be in the luxury and high-priced category, I am confident of the Indian domestic manufacturers' ability to face the increased competition,' he said. Dr. Vivek Tandon, Founder, revalyu Group said, 'The India–UK Free Trade Agreement is a transformative milestone for India's manufacturing and export landscape, ensuring zero-duty access on nearly all goods for both nations. Removal of duty will create a level playing field with major exporters like Bangladesh and Vietnam boosting bilateral trade by an expected £25?billion per annum by 2040. Among those most poised to benefit is India's textile and garment industry, which is projected to double exports to the UK over the next five to six years, driven by an anticipated 11?per cent annual growth.' For emerging sectors like recycled polyester and circular textiles, this deal opens a new frontier. UK brands increasingly demand sustainable fabrics, and with zero-duty access, Indian recycled PET yarn can now compete globally, fuelling a shift towards eco-conscious fashion and strengthening India's position in the circular economy,' he added. Meanwhile, the latest trade data indicates that UK's apparel imports from India grew 10.35 per cent to reach $619.049 million during January-May 2025. India was the third largest sourcing nation after Bangladesh and China. Both nations have supplied around 23.03 per cent and 22.60 per cent garment (in value) in the UK's total garment imports of $8.033 billion in the same period. UK's apparel imports from India grew at a faster pace than the total garment imports, which grew 7.49 per cent from the shipment of $7.473 billion in the corresponding period of the last year, according to sourcing intelligence tool TexPro. Fibre2Fashion News Desk (KUL)
Business Mayor
19-05-2025
- Business
- Business Mayor
Textile stocks rally up to 10% as Bangladesh port curbs likely to generate Rs 1k cr biz for domestic firms
Textile stocks like Siyaram Silk, Kitex Garments and Raymond, among others, shot up to 10 per cent on the BSE today after reports indicate that India's ban on Bangladesh imports through land ports could bring in an additional business of more than Rs 1,000 crore for the domestic textile sector. The shares of Siyaram Silk Mills rose the highest by 10 per cent to an intraday high of Rs 797.35, followed by the shares of Faze Three, which surged by 6.8 per cent to Rs 667. This was further followed by Vardhman Textiles and Redtape shares, which increased by 6 per cent each in the intraday session. Meanwhile, the shares of Kitex Garments and Raymonds hit their 5 per cent upper circuit in intraday trade. The surge in the stocks came after industry experts said that the curb may bring in more business for the domestic players, however, its should be noted that certain branded garments may also see some supply issues in the winter season, which could raise prices of items like t-shirts and denims by 2-3 per cent . 'We were importing garments worth Rs 6,000 crore annually from Bangladesh. We can now expect imports worth Rs 1,000-2,000 crore to be replaced with Indian manufacturing,' said Sanjay K Jain, chairman of National Textile Committee, Indian Chamber of Commerce (ICC), according to previous ET reports. Indian firms have been sourcing woven and knitted apparel from Bangladesh, leveraging the zero-duty benefit. The Directorate General of Foreign Trade (DGFT) issued a notification on Saturday banning the import of garments and several other products from Bangladesh through land routes, while permitting shipments via Kolkata and Nhava Sheva ports. Local industries had been pushing for such restrictions, raising concerns over the surge in textile imports from Bangladesh, driven by zero import duty. The move is also aimed at curbing the indirect import of Chinese fabric, which otherwise attracts a 20 per cent import duty. Trade and industry stakeholders believe that Bangladesh stands to lose more than India due to the revised import policy. In addition to this, the Free Trade Agreement (FTA) between India and the United Kingdom, finalised, is also poised to significantly boost India's textile exports to the UK, further enhancing the prospects of the industry. 'The agreement eliminates tariffs on 99 per cent of Indian goods, including apparel and home textiles, removing the current 8-12 per cent duty and placing Indian exporters on par with competitors like Bangladesh, Vietnam, and Pakistan. China leads UK textile imports (25 per cent share), followed by Bangladesh (22 per cent ), Turkey (8 per cent ), and Pakistan (6.8 per cent ). The FTA will enhance India's competitiveness in this market,' noted a report by ICRA. 'India's apparel and home textiles trade with the UK is projected to double in the next 5-6 years, with export volumes expected to grow at a compounded annual rate of 13 per cent ,' the report added. Read More F.P. Journe Watches: In Pursuit of Precision And Perfection India's textile exports are anticipated to rise from 7-8 per cent to 11-13 per cent by CY2027, a growth which will be supported by incremental capacity additions in the garmenting segment, creating employment opportunities and improving earnings for exporters.
