U.S. tariff hits Indian textile and apparel exporters; 50% drop in revenues, says survey

Over one-third of textile and apparel sector participants have reported that their turnover has halved because of the 50% tariffs imposed by the United States, according to a recent pan-India survey by the Confederation of Indian Textile Industry released on Monday.

The U.S. imposed a reciprocal tariff of 25% and an additional ad valorem tariff of 25%, taking the total duty on Indian exports to 50%. The tariffs came into effect from August 27, 2025.

This drop comes in the wake of the U.S. being a key market for India, accounting for about 28% of the country’s global textile and apparel exports.

The survey revealed that 30% of the respondents found requests for discounts by U.S. buyers as one of the major factors contributing to this decline. Another 25% saw cancellation or postponement of orders as the key challenge. Reduction in order volumes also have had significant impact, with a fifth of respondents attributing to this as a challenge. As a result, about 85% of the respondents have reported an inventory buildup due to the reduction in orders. About two-third of the respondents said they have to offer a discount to their buyers, with a majority of them offering about 25% discounts to remain competitive.

The survey also revealed that 82% of respondents are experiencing an extended credit cycle across the supply chain as a result of the recent impact. While over half of them indicated that the credit period has increased by 3 to 6 months, reflecting a substantial strain on liquidity, around 40% of respondents reported a rise in working capital requirements by more than 30%, further highlighting the growing financial stress within the sector.