US Tariff Puts Indian Textile Exporters at a Competitive Disadvantage, Industry Association Reports

Indian textile and apparel exporters are likely to be at a disadvantage compared to their Asian competitors due to Washington’s newly imposed 10% tariff on Indian products, according to an industry organization on Friday.

The Trump administration has enacted 10% and 12.5% tariffs on goods from 60 trading partners, citing insufficient enforcement of forced-labour import bans.

This duty, which came into effect on Friday, is in addition to the standard U.S. most-favoured-nation tariffs and affects a significant portion of India’s manufactured exports under Section 301 of the U.S. Trade Act of 1974, as stated by the Confederation of Indian Textile Industry (CITI).
Additionally, India has been excluded from the proposed tariff-rate quotas that permit specific textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia—allowing these shipments, which utilize U.S.-sourced cotton and fiber, to enter without incurring the Section 301 duty.

“This unequal treatment may lead to a shift in sourcing orders for textile and apparel products away from India,” remarked CITI Chairman Ashwin Chandran.

According to CITI, India’s textile and apparel exports to the U.S., its largest market, amount to nearly $11 billion annually.

In 2024, Bangladesh exported roughly $8 billion worth of apparel to the United States, while Indonesia and Cambodia shipped around $4 billion each. Together with Malaysia, they qualify for the new textile quota mechanism, granting them a competitive advantage over Indian suppliers in the U.S. market, claim exporters.

The overall impact will hinge on the proportion of garments made with U.S.-origin cotton and fabrics that are eligible for the exemption.

Ajay Srivastava, founder of the Global Trade Research Initiative think tank, estimated that about 70% of Indian exports to the U.S.—including garments, machinery, chemicals, plastics, leather goods, gems and jewellery, and furniture—will incur both standard duties and the new tariff.

These new tariffs, as detailed in a Federal Register notice, cover 99.4% of U.S. imports, although they do allow for numerous product exemptions, such as oil and gas, fertilizers, and certain food items.

No immediate statement has been released by India’s trade ministry.