New Delhi [India], August 26 : With the United States set to impose a steep 50 per cent tariff on Indian textile and apparel exports starting August 27, the Confederation of Indian Textile Industry (CITI) has called for urgent government intervention to mitigate the impact on the sector.
"The government has been discussing with industry on how it can come to our aid during this critical juncture. But given the gravity of the situation, it is our expectation that concrete measures in the form of fiscal support and policy decisions related to raw material availability would be taken immediately," CITI Chairman Rakesh Mehra said.
"At stake are not just the future of India's textile and apparel exporters and consequent loss of foreign exchange earnings for the country, but also at risk are countless jobs in the textile and apparel sector and the chances of achieving the national target of textile and apparel exports worth USD 100 billion by 2030."
Mehra added. India's textile and apparel sector contributes around 2 per cent to the country's GDP and is also one of the biggest providers of jobs and livelihoods. The US is the single-largest market for India's textile and apparel items. Almost 28% of India's textile and apparel exports go to the United States. India's exports of textile and apparel products to the US in the financial year 2024-25 were close to USD 11 billion.
China is the biggest supplier of textile and apparel items to the US, followed by Vietnam, India and Bangladesh. At 20% each, the current US tariff rates for Vietnam and Bangladesh are significantly lower than those of India.
Recently, the government has taken some steps to help the textile sector become more competitive.
Mehra said that Indian textile companies are already engaged in diversification efforts to reduce their dependence on the US market. "The industry is doing all it can to mitigate the impact of the high US tariff, but then again, developing new markets and new clients takes time and cannot be done overnight," Shri Mehra pointed out. "The importance of the US for our textile and apparel exporters can never be undermined," Mehra added.
In July, India signed the Comprehensive Economic and Trade Agreement (CETA) with the UK, which would ensure that India's textile and apparel exports will no longer face a duty disadvantage in the UK market. The CETA is expected to be operational in 2026.