Windfall for India’s Textile Industry! Trump’s Tariffs Tilt the Scales in New Delhi’s Favor

As U.S. President Donald Trump’s "reciprocal tariffs" reshape global trade, India’s textile industry finds itself in an unexpected sweet spot.

Experts hailed the 27 percent tariff slapped on Indian goods—announced April 2, 2025, from the White House Rose Garden—as a golden ticket, giving India a cost edge over rivals like China (54 percent), Vietnam (46 percent), and Bangladesh (37 percent). With the U.S. sucking in $36 billion of India’s textile exports yearly, this tariff twist could be a game-changer—or a gamble if American demand tanks.

"The U.S. move puts India in a highly favorable position," said Raymond Group CFO Amit Agarwal, who’s already fielding calls from U.S. buyers sniffing out spare capacity. "We’re seeing inquiries spike."

EY India’s Paresh Parekh echoed the buzz, dubbing it "advantage India." He pointed out the tariff gap: Cambodia’s at 49 percent, Pakistan’s 29 percent, Sri Lanka’s 44 percent—leaving India’s 27 percent looking like a bargain. "It’s an opportunity to snatch market share," Parekh said, though he warned a U.S. price hike could shrink the pie for everyone.

India’s textile sector, pumping out $10 billion in U.S.-bound goods in FY24 (28 percent of its $36 billion total), has long jostled with Asian heavyweights. Now, with China’s exports crippled by a 54 percent hit and Vietnam’s pricier at 46 percent, India’s poised to pounce.

"The fundamentals are solid—robust supply chains, skilled workers, quality manufacturing," said Apollo Fashion International’s Shiraz Askari. But he cautioned: "Short-term, thin margins will feel the pinch. Pricing and demand could wobble."

Deloitte’s Anand Ramanathan sees a silver lining—if India plays its cards right. "Lower tariffs boost competitiveness, but exporters must scale up capacity, modernize tech, and sharpen design to cash in," he said. Raymond’s betting on a dual play: its 7.5 million-piece capacity in India plus 3.2 million in Ethiopia, where the U.S. tariff’s a mere 10 percent. "Ethiopia’s our ace for U.S. sourcing," Agarwal noted.

The catch? A potential U.S. consumption dip as tariffs jack up prices, plus competition in other markets where duty-hit nations might dump goods. "We need efficiency, compliance, and new markets to dodge over-reliance on the U.S.," Askari urged. Hopes also ride on a "zero-for-zero" trade deal with the U.S., a long-shot that could cement India’s edge.