The U.S.’s new 50 percent tariffs, effective from Wednesday, August 27, 2025, threaten to derail nearly one-fourth of India’s textile exports over the next six months, experts warn. As America remains the largest market for India’s apparel industry, exporters are reeling from order cancellations and a steep hit to competitiveness, according to industry leaders. The textile sector, valued at USD 179 billion in 2024-25 with USD 37 billion in exports, faces a potential 20-25 percent revenue drop unless swift adjustments are made.

However, a lifeline has emerged with the Indian government extending duty-free cotton imports until December 31, 2025, announced on Thursday, August 28. This follows an initial exemption from August 19 to September 30, offering a critical window for exporters. Chandrima Chatterjee, Secretary General of the Confederation of Indian Textile Industry (CITI), hailed the move, noting, “The longer window will benefit new orders, as shipping takes 45-50 days.” The exemption is expected to close the 10-15 percent price gap between domestic and international cotton, boosting cost competitiveness.

The Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri expressed alarm in a letter to Prime Minister Narendra Modi, calling the U.S. tariffs a “deep concern” that jeopardizes India’s standing in the American market. Despite the setback, Sekhri assured collaboration with the Ministries of Textiles and Commerce & Industry, which have pledged support. Exporters are now pivoting to alternative markets, leveraging India’s free trade agreements to offset the impact, while balancing the government’s focus on protecting farmers, dairy, and fisheries.

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As the industry navigates this crisis, the extended cotton duty waiver offers a glimmer of hope, though the next six months will test India’s ability to adapt to this trade shock.

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