India’s Textile Comeback: How the US Trade Reset Is Rewriting the Export Story

Sumon Mukhopadhyay 

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After nearly two difficult years of weak demand and margin pressure, India’s textile sector has finally caught a strong policy tailwind. A late-night breakthrough a few weeks back between Donald Trump and Narendra Modi has reset trade dynamics—lowering reciprocal tariffs on Indian goods to 18% from 25% and removing additional duties linked to Russian crude purchases.

Why the US Deal Matters So Much

The United States absorbs nearly 28% of India’s textile and apparel exports, totaling roughly $11 billion annually. Earlier tariff hikes had slashed shipments by over 50% within a single quarter, disrupting order flows across spinning, fabric, and garment units. With duties now reduced, Indian exporters regain pricing power and competitiveness almost overnight.

The Strategic Advantage: Cheaper US Yarn

Commerce Minister Piyush Goyal has highlighted a key strategic shift: India is set to receive preferential access to the US market when garments are produced using US-origin cotton or yarn.

• 🔹 Lower Raw Material Costs: Direct benefit for Indian manufacturers.
• 🔹 Reduced Export Duties: Lower hurdles for finished garments.
• 🔹 Cost Dominance: A powerful advantage across the entire value chain.

Global Competitiveness: The Numbers

Post-deal export duties into the US now position India as a leader among its peers:

Country	Tariff Rate
India	18%
Indonesia, Malaysia, Pakistan	~19%
Bangladesh, Sri Lanka, Vietnam, Taiwan	~19%

A Sector Turning the Corner

Export-focused players across garments, home textiles, and spinning stand to benefit significantly. Keep a close watch on:

Kitex Garments, Indo Count Industries, Welspun Living, KPR Mill, Trident, Arvind, Bombay Dyeing, and Vardhman Textiles.

"The  trade reset didn’t just ease tariffs—it restored cost competitiveness. After two lean years, the industry isn’t merely recovering; it’s re-entering the global race with real momentum."