Reduce tariff with U.S., suggest textile exporters

Sub : Eco

Sec : External sector

Significance of the U.S. Market for Indian Textile & Apparel (T&A) Exports

The U.S. is the single largest export destination for India’s textile and apparel sector.
28.5% of total Indian T&A exports (January–November 2024) were to the U.S. (CITI).
India is the third-largest supplier of T&A to the U.S. with a 10.8% market share (China: 25.6%).

Tariff Structure and Export Trends

The U.S. levies tariffs on textiles and apparel ranging from 2% to 32% (AEPC).
U.S. imports from China declined at a CAGR of 9.4% in the last five years, while imports from India grew at a CAGR of 9.1%.
In 2024, India’s T&A exports to the U.S. stood at $10.8 billion, whereas U.S. exports to India were only $0.41 billion.

Composition of Trade

India imports primarily fibre products from the U.S., with cotton making up 50.6% of total U.S. T&A exports to India.
Indian exports to the U.S. are dominated by apparel and home textiles (81.5%).

Suggestions by Export Bodies

Apparel Export Promotion Council (AEPC)

Reduction in tariffs will not negatively impact Indian exporters (Mithileshwar Thakur, AEPC Secretary General).

Confederation of Indian Textile Industry (CITI)

India should explore a zero-for-zero trade agreement with the U.S. with necessary safeguards for sensitive products.
Vietnam benefits from duty concessions, so tariff reduction will create a level playing field for India.
With reduced tariffs, India’s T&A exports to the U.S. could reach $16 billion in the next three years.

Cotton Textiles Export Promotion Council (Texprocil)

Tariffs should be reduced to match the U.S. tariff for T&A.
Trade balance is in India’s favour; Indian textiles can gain significantly from tariff reduction or a zero-for-zero agreement.
India is exploring a Free Trade Agreement (FTA) with the U.S., and further developments are awaited (Siddhartha Rajagopal, Texprocil Executive Director).