Amid rising issues by companies concerning the impression of the 25 per cent reciprocal tariff by the US, the Ministry of Textiles has referred to as a gathering with main textile and attire exporters from throughout the nation right here immediately. The assembly, to be chaired by Union Textiles Minister Giriraj Singh, has been referred to as to debate the challenges being confronted by exporters of their order flows, particularly amid the widening tariff differentials with different competing Asian international locations after the current imposition of secondary tatiffs by the US on India.
With the US being India’s largest export marketplace for the labour-intensive textile and attire business, textile exporters are below stress after the hike in import tariff to 25 per cent from August 7 by the Trump administration, which is ready to rise additional to 50 per cent on August 27. Textile and attire exporters have been asking for help from the federal government as their orders have been hit with consumers both asking them to share the tariff hike burden or pausing the orders until additional readability emerges concerning the commerce deal negotiations between India and the US.
Disruption in Money Flows
One of many main issues raised by textile and attire exporters of their representations to the federal government has been a couple of disruption of their money circulation with a discount in orders by consumers from the US, officers stated. “Exporters are asking for sops. They’re asking for delicate loans or curiosity subvention schemes or centered market schemes. Their concern is that they need to get money in hand,” an official informed The Indian Categorical.
Exporters are hoping that the tariff hike is short-term and they’re able to retain the orders as consumers are already shifting to different international locations with decrease tariffs similar to Vietnam and Bangladesh, with India’s 25 per cent reciprocal tariff exceeding these relevant to different competing Asian international locations, besides China. If the upper levies proceed, there’s additionally a fear in coverage circles that the misery within the textiles and apparels sector might end in job losses.
The federal government is participating repeatedly with exporters to grasp the evolving state of affairs. “Exporters have been speaking their points. The federal government is taking their suggestions and can present the required help to them,” one other official stated.
Affect on India’s merchandise exports
The Ministry of Finance has estimated that greater than half of the nation’s merchandise exports to the US will probably be topic to the upper reciprocal tariff. The US is a key marketplace for Indian Prepared-Made Clothes (RMG) exports; its share in India’s complete garment exports in 2024 stood at 33 per cent, as per the Attire Export Promotion Council (AEPC). Dwelling textiles and carpets are additionally vital export-oriented sectors, with exports accounting for 70-75 per cent and 65-70 per cent of complete gross sales, respectively, for these sectors. Of this, the US accounts for 60 per cent of exports for residence textiles and 50 per cent of exports for carpets.
US President Donald Trump had introduced a 25 per cent tariff on Indian items in a publish on social media platform Fact Social on July 30, with a further however unspecified “penalty” for importing vitality and defence gadgets from Russia. On August 6, the penalty was clarified to be a further 25 per cent tariff that will probably be efficient from August 27.
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