Indian textile, apparel exporters in shock as Trump tariff touches 50%

The Confederation of Indian Textile Industry (CITI) has expressed deep concern over the potential adverse impact of the additional 25% tariff announced by U.S. President Donald Trump on goods exports from India on August 6. Along with an earlier announced 25% tariff, an effective 50% tariff is seen as a major setback for Indian textile and apparel exporters, CITI says.

The U.S. is India’s largest market for textile and apparel exports.

“The U.S. tariff announcement of August 6 is a huge setback for India’s textile and apparel exporters as it has further complicated the challenging situation we were already grappling with and will significantly weaken our ability to compete effectively vis-à-vis many other countries for a larger share of the U.S. market,” Rakesh Mehra, chairman, CITI, said.

The industry body pointed out that Indian textile and apparel exports to the U.S. had started to slow down even after the initial 25% tariff was announced. After a promising performance in the first quarter of 2025, there was a notable slowdown in textile and apparel exports from India to the U.S. in June 2025. India’s exports of textile and apparel items to the world’s number one economy grew by only 3.3% compared to June 2024. The rate of growth was much lower compared to India’s earlier growth trajectory and significantly below the growth rates achieved by competitors like Vietnam and Bangladesh, CITI points out.

In contrast to a 50% tariff rate on Indian exports, the new U.S. tariff rate for Bangladesh is 20%. The latest US tariff rate for Indonesia and Cambodia is 19% each. The tariff rate for Vietnam is 20%. Currently, China is the biggest exporter of textiles and apparel items to the US, followed by Vietnam, India, and Bangladesh

The association wants the government to fast-track the introduction of measures to limit the hardship likely to be faced by local textile and apparel exporters following the most recent U.S. tariff decision. “It is our fervent appeal to the government to urgently take steps to come to the aid of India’s textile and apparel sector during these hugely testing times, given the government’s strong commitment to increase the competitiveness of local industry and help our companies become major players on the world stage,” Mehra said.

CITI is also pinning a lot of hopes on the successful completion of a bilateral trade agreement (BTA) between India and the US. “A well-rounded BTA with the U.S., which takes proper care of India’s sovereign interests and is also fair and balanced, could be a win-win proposition for both nations,” Mehra said.