Amid trade disruption caused by Trump’s tariff imposition, the Indian Textiles & Apparel sector is gearing up to revisit its strategy in order to reset its goals going forward. The exporters as well as manufacturers have started recalibrating trade strategies amid these global uncertainties.
The companies are devising strategies to adapt to evolving market dynamics, with majority of them shifting their focus toward domestic clients, prioritizing local customer needs to ensure stability. The domestic T&A market is currently pegged at around US$ 135 billion, while the industry exports T&A goods worth around US$ 37 billion.
Experts firmly believe that given the strong domestic market, even an additional growth of 7–8% in the domestic market can significantly offset the US$ 10–11 billion worth of exports to the US. Moreover, in the next two months or so, the festive season will help boost the demand in the domestic demand. The recent GST reforms by the government will also further push the demand surge.
India primarily exports cotton-based textile products to the US, predominantly home textiles and apparel, which together accounted for around 90% of Indian textile exports to the US in CY24. Moreover, multiple efforts are being initiated to mitigate the setback in the US market, which accounts for a significant share (~28-29%) of India’s global exports.
While exporters are consciously scouting for other markets like the EU, Middle East, Canada and Australia, in the short run, they are also trying to hold on to the existing buyers in the US through mutual negotiations where the stakeholders are looking to soften the tariff consequences by sharing the hit among themselves.
They view that that it would be a futile proposition to completely lose their buyer base in the US in one go and hence they are making all possible negotiations with their US buyers, hoping that the present impasse could be short term in nature. There are large textiles players which are also contemplating temporarily shifting a part of their manufacturing (maybe through contract manufacturing) to other overseas locations which enjoy lower US tariffs.
News courtesy: Textileinsights