The rollback of the 50% US tariff is a lifeline for the Indian textile industry, said the Tamil Nadu-based Southern India Mills’ Association (SIMA).
The sudden imposition of the 50% US tariff had posed an unprecedented challenge to the textile and clothing industry, which is largely concentrated in Tamil Nadu districts such as Coimbatore and Tirupur. Indian textiles account for nearly 29% of total US textile and apparel imports, making the US a critical market for the sector.
Exporters said the abrupt tariff hike severely disrupted India’s manufacturing value chain and also adversely impacted US consumers and importers through higher costs and supply uncertainties. Textile and clothing (T&C) exports to the US, valued at around USD 11 billion, account for nearly 29% of India’s total T&C exports, underscoring the market’s strategic importance.
SIMA Chairman Durai Palanisamy said exporters heavily dependent on the US market, particularly in Tamil Nadu, faced a severe crisis following the tariff hike. “Production levels declined by 30–70% across several units, rendering around 10 lakh workers jobless and prompting the government to announce a relief package to mitigate the unforeseen disruption,” he said.
He added that US buyers had begun shifting sourcing to competing countries such as Pakistan, Bangladesh and Vietnam, posing a serious threat to India’s export competitiveness and market share in the US textile and apparel segment. The reduction of the tariff to 18% will significantly enhance the global competitiveness of Indian textile exports and has restored confidence across the industry, exporters said.
Palanisamy noted that the 18% tariff is the lowest rate negotiated by any competing textile and clothing exporting country with the United States, reflecting the strong diplomatic and trade efforts of the Indian government. He pointed out that India has successfully concluded trade agreements with three major global markets — the US, the UK and the European Union — apart from several other countries, and is steadily moving towards securing preferential or free market access across key international markets.
“These strategic initiatives are expected to trigger a significant surge in demand, strengthen export momentum and place the country on a higher and more sustainable growth trajectory,” he said.
The SIMA chairman thanked Prime Minister Narendra Modi and Union Minister for Commerce and Industry Piyush Goyal for concluding two landmark trade deals within a week, along with announcing what he termed “game-changing policy measures” for the textile industry in the Union Budget 2026–27. He also expressed gratitude to the Tamil Nadu Chief Minister for recommending the industry’s concerns to the Prime Minister and extending support in securing an amicable trade deal with the United States.
SIMA Secretary General K. Selvaraju said that as the second-largest employment provider after agriculture, supporting over 110 million livelihoods — particularly in rural areas and among women — the textile sector has traditionally depended heavily on the US market. The industry was therefore keenly awaiting the early conclusion of a bilateral trade agreement between the two nations.
“The industry is now poised to achieve sustained double-digit growth in the coming years, aligned with the Prime Minister’s vision of building a Viksit Bharat by 2047,” Selvaraju said. “With strong policy support, enhanced market access and continued investments, the textile and clothing sector aims to expand to a domestic market size of $1.8 trillion and achieve export earnings of $600 billion, positioning India as a global leader in the textile value chain.”