ADVERTISEMENT
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.
October 2025
As India’s growth story gains momentum and the number of billionaires rises, the country’s luxury market is seeing a boom like never before, with the taste for luxury moving beyond the metros. From high-end watches and jewellery to lavish residences and luxurious holidays, Indians are splurging like never before. Storied luxury brands are rushing in to satiate this demand, often roping in Indian celebs as ambassadors.
Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.