India’s $37-billion textile and apparel export industry expects a sharp cut in US tariffs to restore its competitiveness against Vietnam, China, Bangladesh and Indonesia. Industry players say the latest trade developments could drive double-digit growth in export volumes as US-based retailers of branded textile items like Walmart, JCPenney, GAP, Target & Costco step up sourcing from India following recent trade deals with the US and the EU.
“With the reduction in US tariffs, India’s textile and apparel sector is back on a level playing field in the US market. With key free trade agreements nearing closure and rising US sourcing interest, the export outlook is set to improve steadily,” said Prabhu Dhamodharan, convenor of the Indian Texpreneurs Federation (ITF), Coimbatore.
According to him, the sector could see month-on-month double-digit growth in apparel and home textile exports, lifting the monthly apparel export run rate to $1.5–1.6 billion from the current $1.27 billion.
Indian textiles
India’s total textile and apparel exports stood at $36.61 billion in FY25, with the US remaining the single-largest apparel market, accounting for nearly a third of exports. The industry was among the worst hit by the steep 50% punitive tariff imposed by the US in August, which forced American buyers to cancel Indian orders and shift sourcing to countries such as Bangladesh and Vietnam.
On Monday, the US sharply reduced the baseline tariff on Indian exports to 18%, making the country relatively more competitive than Indonesia (19%), Vietnam (20%), Bangladesh (20%) and China (40%).
“With around 60% of India’s knitwear exports, Tiruppur will be the biggest beneficiary of this move,” said K M Subramanian, president of the Tiruppur Exporters’ Association (TEA). Known as India’s knitwear hub, Tiruppur lost over ₹15,000 crore of business in 2025 due to the earlier tariff hike, leading to layoffs and shutdowns among smaller units.
“The US tariff reduction, along with the India–EU FTA, will bring buyers back to India,” he said.
Kumar Duraiswamy, joint secretary, TEA, said the timing of the US trade deal was critical. “If this had taken another two to three months, buyers would have permanently shifted to other destinations,” he said, adding that US importers had already begun re-engaging and business could normalise within the next two to three months.
India’s knitwear exports
India’s knitwear exports stood at $7.7 billion in FY25, with 60% contribution from Tiruppur. Overall knitwear exports touched $5.2 billion in the first eight months of the year, of which Tiruppur contributed nearly $3 billion. Duraiswamy said India’s apparel exports could reach $40 billion by 2030 as the industry ramps up capacity, modernises operations and expands into newer product segments such as man-made fibres.
Downstream players across the textile value chain also expect the US–India trade deal to provide a boost. “This development is particularly positive for Sanathan Textiles, given its diversified presence across polyester yarns, cotton yarns and technical textile yarns, which have strong relevance in the US market,” said Sammir Dattani, executive director, Sanathan Textiles.
At the same time, exporters remain cautiously optimistic, having diversified away from the US market amid tariff uncertainty. Pallab Banerjee, managing director of Pearl Global Industries, said the US tariff deal offers a clear advantage to its India-based operations even as the company has more diversified geographic exposure than its peers.
“Most of us (trade) were offering discounts to US customers to offset the penalty tariff. That pressure has now eased, and India enjoys a 2% tariff advantage over competing countries,” Banerjee said. Pearl Global, which counts manufacturers brands like Zara, Tommy Hilfiger & Calvin Klein, derives nearly 50% of its group revenue from the US. Exports from India to the US were 15–16% and the company was exploring diversification to non-US markets at the peak of 50% tariffs.
“Q4 should see relief from margin pressure, while from Q2 next year we expect an improvement in topline growth from the US market,” Banerjee added.
According to Motilal Oswal, Raymond Lifestyle, Indo Count, Welspun Living, Gokaldas Exports and Kitex are among the key beneficiaries, with 65–90% of their revenues linked to the US market.