Indian textile stocks came under pressure today as investors reacted further to the US move to double tariffs on Indian imports. The US tariff hike has raised duties on textiles and garments to 50%.
This led to the share price of leading players in the textile sector such as KPR Mill, Gokaldas Exports, Trident, Vardhman Textiles, Arvind and Welspun Living to fall up to 3% in intraday trade.
Why tariffs matter for textiles
The setback comes after US President Donald Trump signed an executive order imposing an additional 25% duty on Indian imports, taking the total levy to 50% on several categories, including garments and fabrics, effective August 27.
Textile hubs halt production as US tariff shock hits exports
Indian textile hubs including Tiruppur, Surat and Noida have begun halting or scaling down production after the US imposed a steep 50% import tariff on Indian garments and fabric.
According to the Federation of Indian Export Organisations (FIEO), nearly Rs 72,000 crore worth of exports is now at risk. Furthermore, this also raises fears of widespread job losses in a sector that employs millions of workers.
The industry body also raised concern that more than half of India’s US bound shipment now faces a 30-35% cost disadvantage compared with rivals such as Vietnam and Bangladesh.
US reliance on Indian textiles
The US is India’s largest buyer of textiles, and higher tariffs could directly affect nearly 55% of shipments.
But with tariffs on Indian goods now higher than those faced by rivals like China (30%), Vietnam (20%), Indonesia (19%) and Japan (15%), there are concerns that buyers may start shifting orders to competing markets.
Market reaction: Stocks in the red
The market quickly reacted to these worries. S P Apparels lost 1.4%, and Siyaram Silk Mills fell 1.6%.
Among others, Raymond dropped 1.9%, Sai Silks (Kalamandir) shed 2%, while Kitex Garments tumbled 5% to become the day’s biggest loser.
Even midcap exporters were not spared. Vardhman Textiles declined 2.2% to Rs 389.20, Ambika Cotton Mills slipped 0.6%, while Welspun Living and Gokaldas Exports were down nearly 2% each.
Some of India’s biggest textile exporters include Gokaldas Exports, Vardhman Textiles, Arvind, Welspun India, Shahi Exports, Raymond, Pearl Global, and Alok Industries. With the latest tariff development, the companies now find themselves in the direct line of fire from U.S. tariffs.
Government’s balancing act
In an interesting development related to this, the Centre tried to soften the blow with a fresh relief measure.
The government has extended the exemption of import duty on cotton until December 31, 2025. This can be seen as a move aimed at easing input costs for textile mills and exporters.
Also, per reports, the government is taking other efforts to soften the blow. These include singing Free Trade Agreements (FTA) with more countries.