The textile sector in India is facing one of its toughest crises as a direct result of the United States’ tariff hike under President Donald Trump. With the additional 25% duty imposed recently, India is now facing a total tariff of 50% on its exports to the US. This has not only created unprecedented challenges for textile producers but has also disrupted the country’s supply chain in multiple sectors. Industry leaders have warned that the impact could be long-lasting if policy measures are not taken urgently.
How Trump’s Tariff Escalated
The trade dispute between India and the United States intensified when the Trump administration imposed a 25% tariff on Indian goods. This was coupled with penalties on India for its purchases of Russian oil. The recent imposition of another 25% tariff has raised the total to 50%, making it the highest tariff rate imposed on any country in the world.
Apart from India, only Brazil faces similar high tariffs, highlighting the severity of the restrictions. For India, this steep tariff poses a significant threat, especially to sectors where exports to the US constitute a major share of revenue.
Immediate Impact on the Textile Industry
The textile hubs of Tiruppur, Noida, and Surat have already reported a suspension of production. Manufacturers in these regions, facing higher costs and shrinking margins, are struggling to compete with low-cost rivals such as Vietnam and Bangladesh.
According to S.C. Ralhan, President of the Federation of Indian Export Organisations (FIEO), the rising costs of production have forced many exporters to pause operations. He noted that Indian exporters are losing ground in the international market, with Southeast Asian countries increasingly dominating global textile supply chains.
Ralhan also highlighted the risks facing India’s seafood exports, especially shrimp. The United States accounts for nearly 40% of India’s seafood exports, and the new tariffs are likely to reduce demand, disrupt supply chains, and create hardships for farmers.
Global Competitiveness at Stake
Industry experts warn that Indian goods are becoming uncompetitive in the American market due to the high tariffs. Compared to exports from China, Vietnam, Cambodia, the Philippines, and other Southeast Asian nations, Indian products now appear far less attractive.
Ralhan said, “A 50% tariff has dealt a severe blow to Indian exports. The US is our biggest export market, and such a steep tariff makes it nearly impossible for our products to compete.”
This shift is likely to erode India’s market share in textiles, seafood, and several other export categories, while strengthening the position of competitors who enjoy lower tariff barriers.
Textile Industry Seeks Government Relief
The Confederation of Indian Textile Industry (CITI) has expressed concern over the severe impact of the tariffs on domestic manufacturers. CITI Chairman Rakesh Mehra said the government is in discussions with industry stakeholders to explore possible support measures.
However, he emphasized the need for financial assistance to help the sector survive the crisis. Mehra said that swift policy decisions are also required to ensure the availability of raw materials and maintain competitiveness in the international market.
The industry has urged the government to provide subsidies, tax relief, and easier access to credit facilities to prevent large-scale job losses and business closures.
Wider Economic Implications
The consequences of the tariff are not limited to textiles. With a significant portion of Indian exports headed to the United States, the 50% duty threatens to disrupt multiple industries. From agriculture to manufacturing, the ripple effect of reduced exports could strain the Indian economy at large.
Shrinking exports mean reduced foreign exchange inflows, lower capacity utilization for industries, and a potential rise in unemployment as factories cut back on operations. Farmers, particularly those engaged in shrimp and seafood production, may also face losses if export demand declines sharply.
India-US Talks Amid Trade Tensions
Amid these challenges, India and the United States recently engaged in discussions to strengthen bilateral ties. Senior officials from both countries held talks under the framework of the “2+2” intersessional dialogue.
The discussions covered areas such as civil nuclear cooperation, trade, investment, critical minerals, and energy security. However, the backdrop of strained relations due to Trump’s tariff policies remained a point of concern.
The Indian side is expected to continue pressing for relief or exemptions in certain categories, while the US administration under Trump has so far shown little inclination to roll back the tariffs.
Future Outlook for the Textile Sector
The future of India’s textile exports to the US remains uncertain. Unless tariffs are reduced or compensatory measures are introduced by the government, Indian exporters may continue losing market share to global competitors.
Experts suggest that India should diversify its export destinations to reduce reliance on the US market. Exploring opportunities in Europe, Africa, and Latin America could help mitigate risks. At the same time, investments in technology, efficiency, and value-added products may improve competitiveness despite higher tariffs.
Donald Trump’s decision to impose a 50% tariff on Indian exports has created a major crisis for the country’s textile industry and beyond. With production already halted in Tiruppur, Noida, and Surat, the situation underscores the urgent need for government intervention.
The tariffs not only threaten India’s exports but also put livelihoods at risk, from factory workers to farmers. While India and the US continue dialogue, the immediate reality is one of shrinking opportunities and mounting challenges for Indian exporters.
If swift action is not taken, the impact could ripple through the entire economy, leaving long-term scars on one of India’s most vital industries.
