Will India's textile sector get a 'Trump bump’ from tariffs?

US President Donald Trump has announced heavy tariffs on India.

This comes as part of the White House announcing sweeping taxes on dozens of nations across the world as part of what it calls ‘Liberation Day.’

Trump has previously called India a ‘tariff king’ and an ‘abuser of tariffs.’

But what happened? Will India’s textile sector get a ‘Trump bump?’

Let’s take a closer look

What happened?

The US president has slammed countries in South Asia with heavy tariffs when it comes to their textiles.

Trump initially announced that India will be charged a 26 per cent tariff – though the White House later said the correct figure was 27 per cent.

“India’s Prime Minister Narendra Modi just left the US. He is a great friend of mine, but I told him that ‘you’ve not been treating us right’. India charges us 52 per cent, so we will charge them half of that,” Trump was quoted as saying by Business Standard.

A commerce ministry official described the tariffs on India as a “mixed bag and not a setback.”

There’s good reason for this statement.

This is because other textile-making countries in the region have suffered far more than India.

Vietnam, for example, is facing a 46 per cent tariff, while Sri Lanka is facing a 44 per cent tariff.

Bangladesh and China have been slapped with a 37 per cent and 34 per cent tariff respectively.

For China, things are even worse as this is on top of the 20 per cent tariff Trump levied it on it in January.

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Thailand, on the other hand, has been notified of a tariff of 36 per cent.

According to Business Standard, the total textile imports to the US in 2024 were valued at $107.72 billion.

Imports of clothing, which comprised the majority of textile imports into the US, rose nearly two per cent from $77 billion in 2023 to $79 billion in 2024

The outlet quoted US data on textile shipment and bill of lading data for 2024 as saying that China had a 30 per cent share of its textile imports valued at $36 billion.

Vietnam had textile imports worth $15.5 billion with a 13 per cent share, and while India’s exports were worth $9.7 billion with an eight per cent share.

According to Business Standard, India’s  textile exports to the US comprise apparels, home textiles and others.

Bangladesh’s share of US textile imports shrank to six per cent in 2024 and were valued at $7.49 billion.

Textiles comprise just two per cent of India’s GDP compared to 11 per cent in Bangladesh and 15 per cent in Vietnam, as per Financial Express.

This may dampen the overall economic impact on India.

What do experts say?

Some say India is facing a huge challenge.

Shiraz Askari, president, Apollo Fashion International Limited, said,  “The 26 per cent tariff on Indian footwear and garment exports to the US is a significant challenge, especially for businesses operating on thin margins.”

“It will impact pricing and demand in the short term, but the fundamentals of the industry remain strong. India has built a robust supply chain, skilled workforce, and growing capabilities in quality manufacturing. Compared to countries like Vietnam and Bangladesh, which now face even higher tariffs, India still has a relative cost advantage. The focus now should be on improving efficiency, strengthening compliance, and diversifying markets to reduce over-dependence on any one geography. The industry has handled disruptions before, and this is another moment that calls for smart, decisive action.”

But others say this development could give India’s textile industry the leg up over its competitors.

“With higher levies on other countries, India is better off,” Deven Choksey Research was quoted as saying by Financial Express.

“In the past, India, Bangladesh, and Vietnam faced similar tariff structures for cotton apparel exports. However, with the recent changes, India now holds a tariff advantage over these competing nations in comparative terms, potentially boosting its competitiveness in the US market for apparel exports,” Prabhu Dhamodharan, convenor of Coimbatore-based Indian Texpreneurs Federation, an industry association, told the outlet.

Business Standard reported that India’s Apparel Export Promotion Council has already urged the textiles ministry to reduce tariffs on textile products to nil.

“If India reacts by withdrawing import duty on cotton from 11 per cent to 0 per cent, it will benefit both countries. Now the ball is in India’s court,” K Venkatachalam, chief advisor, Tamil Nadu Spinning Mills Association, told the outlet.

“India is well-positioned to expand its market share in the US, driven by this tariff edge. Ongoing trade negotiations may further enhance India’s position—particularly if India offers zero-duty import of cotton in return for sector-specific benefits in apparel exports. This move could prove to be a game changer for the industry,” Dhamodharan said.

Manish Jain, Chief Strategy Officer & Director, Mirae Asset Capital Markets, told Financial Express, “India will have two-way impact of these reciprocal tariffs, 1st higher tariff on competing nations to support market share gains as China, Bangladesh and Vietnam are levied at much higher rate of 34 per cent, 47 per cent and 46 per cent respectively compared to 26 per cent on India. Secondly, the increase in prices to end consumers will reduce the overall demand, shrinking the market size.

GTRI Founder Ajay Srivastava called the development a key area of opportunity.

He said this was a chance for Indian textile manufacturers to increase their market share in the US.

“One of the most prominent areas of opportunity lies in textiles and garments. The high tariffs on Chinese and Bangladeshi exports create room for Indian textile manufacturers to gain market share, attract relocated production, and increase exports to the US,” Srivastava said.

Given India’s strong foundation in textile production and comparatively lower tariff rates, the sector is expected to witness higher global demand and new investments, he added.

They also pointed out that India is currently negotiating a bilateral trade deal with the US.

According to officials, the first phase of the pact by could be finalised by September-October.

Gautam Khattar, principal, Price Waterhouse & Co LLP, said, “…it could be anticipated that further exemptions may be built in through these negotiations to mitigate the tariff impact on Indian exports. The US, however, has negated many commitments made in their earlier FTAs through this move. A word of caution for India would thus be to proactively ensure that it future proofs its trade pact with the US, while negotiating the BTA.”

The commerce ministry official said that “the ministry is analysing the impact of the announced tariffs.”

The official added that there is a provision that if a country would address the concerns of the US, the Trump administration can consider reducing the duties against that nation.