Summary
India’s fabric exports deal with a prospective 20-25% hit in the next 6 months due to the United States enforcing 50% tariffs, affecting clothing and fabricated products considerably. The extension of duty-free cotton imports up until December 31 uses some relief by enhancing expense competitiveness. Exporters are checking out alternative markets and methods to alleviate the effect, while the federal government guarantees assistance.
As the 50 percent tariffs enforced by the United States enter result, near to one-fourth of India’s fabric exports might be badly affected in the next 6 months, with America being the biggest export market for the nation’s fashion industry and exporters facing order cancellations, specialists stated on Thursday.
The extension of duty-free import of cotton by 3 more months till December 31 is anticipated to bring some much-needed relief to the domestic fabric market, as it looks to reduce the effect of the high tariffs by re-orienting its export method and checking out alternate locations other than the United States, by leveraging India’s existing totally free trade arrangements (FTAs).
“We are looking at a hit of at least 20-25 per cent for the next six months, if I am considering some amount of re-orientation to be done because otherwise the figure is 28 per cent of exports, largely apparel and made-ups,” Confederation of Indian Textile Industry (CITI) Secretary General Chandrima Chatterjee informed PTI.
The federal government on Thursday extended duty-free import of cotton by 3 more months till December 31 to support fabric exporters dealing with high 50 percent tariffs in the United States. Previously, on August 18, the Finance Ministry had actually permitted task exemption on cotton imports from August 19 till September 30.
“We are very relieved because the earlier exemption was not benefiting new orders that can be placed for cotton as it takes a minimum 45-50 days to be shipped. So now this relatively longer widow will benefit the new orders,” Chatterjee stated.
She stressed that the cotton import responsibility exemption will impart expense competitiveness by reducing the expense differential.
“Prior to these exemptions the difference between the domestic cotton price and the international bench-mark was 10-15 per cent, that will be addressed,” the CITI secretary general stated.
In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri stated the statement of 50 percent mutual tariff by the United States on Indian imports refers deep issue for the nation’s fabric and fashion industry.
“The United States is one of the largest export destinations, and such a steep tariff will severely impact the competitiveness of Indian products in the American market, hurting both exporters and consumers,” Sekhri specified.
He guaranteed all assistance to the federal government on its stand of safeguarding the interests of Indian farmers, dairy market and anglers.
“Our industry is already experiencing the effects of the tariff hike, with potential losses and order cancellations. We are exploring alternate markets and strategies to mitigate the impact of the US tariffs. We are also in active discussions with the Ministry of Textiles and Ministry of Commerce & Industry. In our meetings with the ministers of both the ministries, we have been assured of their best possible support,” Sekhri stated.
In 2024-25, the general size of the fabric and clothing sector is approximated at USD 179 billion, consisting of a domestic market of USD 142 billion and exports worth USD 37 billion.