US President Donald Trump’s imposition of a 25% additional import duty, plus an unspecified penalty, on Indian goods effective August 1, 2025, is set to severely impact India’s textile and apparel exporters, experts warn. The US, India’s largest market for these exports, accounts for $5.6 billion of the $17 billion in ready-made garment exports annually, according to Cybex Exim Solutions. The new tariffs, coupled with penalties linked to India’s oil and military trade with Russia, place Indian exporters at a competitive disadvantage compared to Vietnam (20% tariff) and Indonesia (19% tariff).

Chandrima Chatterjee, Secretary General of the Confederation of Indian Textile Industry (CITI), expressed deep concern over the ambiguous penalty clause, which creates uncertainty for export orders in the coming months. “The 25% tariff is challenging, but the undefined penalty is extremely worrisome,” she told PTI, noting potential order cancellations and price reduction pressures. Cybex Exim Solutions highlighted that smaller manufacturers are particularly vulnerable, urging a shift toward alternative markets like the UK, EU, UAE, Japan, and Korea.

Rajeev Gupta, Joint Managing Director of RSWM Ltd, emphasized the need for clarity on tariffs, especially relative to China, which faces a 34% duty. Despite the challenges, Gupta remains optimistic about Indian manufacturers’ resilience, advocating for strategic diversification to mitigate losses. The tariff hike threatens India’s competitiveness in the US market, where Vietnam and Indonesia now hold a pricing edge, potentially reshaping global textile trade dynamics.

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