As Trump tariffs slow down garment exports to US, industry hopeful of India-EU FTA and implementation of India-UK FTA
ADVERTISEMENT
While Trump tariffs are slowing down the growth of India’s textiles and readymade garment (RMG) exports to the US, expected announcement of a free trade agreement (FTA) with the European Union and imminent implementation of India-UK FTA are giving hopes to the country’s export-oriented apparel and RMG sectors.
Growth of RMG export
In December 2025, the growth of RMG export was just 2.89%, reflecting the challenges of inflationary pressures and geopolitical uncertainties in key international markets such as the US.
“With India-EU FTA likely to be concluded within a fortnight and UK FTA about to be implemented shortly, Indian apparel industry will have a tremendous edge in market access to these developed economies holding substantial share in Indian apparel export basket, which in turn will hugely boost our export prospects”, A Sakthivel, Chairman Apparel Export Promotion Council (AEPC) said.
US accounts for 29% of India’s textile and RMG exports
US accounts for almost 29% of India’s textile and RMG exports. EU is the second-largest market with about 20% share while UK is the fifth-largest export destination with about 6% share in textile and RMG exports.
The top three most exported RMG products by India to USA are cotton T-shirts (9.71% of India’s total RMG exports to USA), women or girl’s dresses of cotton (6.52%) and babies’ garments of cotton (5.46%).
January 2026
Netflix, which has been in India for a decade, has successfully struck a balance between high-class premium content and pricing that attracts a range of customers. Find out how the U.S. streaming giant evolved in India, plus an exclusive interview with CEO Ted Sarandos. Also read about the Best Investments for 2026, and how rising growth and easing inflation will come in handy for finance minister Nirmala Sitharaman as she prepares Budget 2026.
According to Sakthivel, Indian apparel exporters are cautiously optimistic about the growth prospects of India’s RMG exports this year. “With global demand expected to improve gradually, India is well-positioned to gain market share due to its reliable supply chain, compliance standards, and growing design capabilities With sustained policy support and continued industry efforts, we are confident that the apparel sector will return to a stronger growth trajectory in the coming time”, he said.
AEPC had recently lauded the government’s support to the exporters, particularly for the announcement of the Interest Subvention Scheme, Credit Guarantee support for export-linked working capital loans to MSMEs under CGTMSE, and the extension of trade finance support to exports of selected products. The export promotion council had also sought enhancing the higher cap limit under the Interest Subvention Scheme, in order to further strengthen the competitiveness and liquidity position of MSME exporters.