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Trump Tariff Threatens India's Textile Exports

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  Published in Sports and Competition on Monday, February 23rd 2026 at 6:26 GMT by moneycontrol.com
      Locales: UNITED STATES, INDIA, CHINA

New Delhi, February 23rd, 2026 - India's thriving textile export sector is bracing for significant disruption following the implementation of a 15% tariff on Indian goods entering the United States, a move instigated by former President Donald Trump, now back in office. The tariff, effective since early February, is rapidly eroding the competitive advantage Indian manufacturers previously held in the crucial US market, sparking concern among industry leaders and prompting calls for governmental intervention.

For decades, India has been a global textile hub, renowned for its skilled workforce, cost-effective production, and diverse range of fabrics and finished goods. The US has consistently been a primary destination for these exports, accounting for a substantial portion of India's textile revenue. However, this longstanding trade relationship is now under considerable strain.

Bharat Shah, President of the Textile Exporters' Association, expressed the gravity of the situation, stating, "The 15% tariff is a devastating blow. It has effectively nullified the price competitiveness we previously enjoyed. We are no longer able to offer products at rates that can effectively compete with manufacturers from countries not subject to this tariff." This sentiment is echoed throughout the industry, with businesses reporting immediate impacts on order volumes and future projections.

The ramifications extend beyond simply higher prices for US consumers. The tariff affects a broad spectrum of textile products, including apparel - encompassing everything from everyday clothing to high-fashion items - home textiles like bed linens and curtains, and the increasingly important sector of technical textiles used in industries such as automotive, healthcare, and infrastructure. The broad impact threatens a significant portion of India's export portfolio and the livelihoods of millions employed within the sector.

Industry analysts predict a potential shift in sourcing patterns as US importers seek alternatives to Indian textiles. Countries like Vietnam, Bangladesh, and Indonesia, which currently benefit from more favorable trade agreements with the US, are poised to capitalize on this situation. This could lead to a long-term erosion of India's market share, a prospect that exporters are desperately trying to avoid.

"We're seeing initial signs of order cancellations and postponements," explains Priya Verma, a leading textile exporter specializing in organic cotton apparel. "US buyers are understandably hesitant to commit to large orders when the final cost is significantly higher. They're actively exploring options in other countries, and frankly, it's difficult to blame them."

The Indian government is under increasing pressure to respond. The Textile Exporters' Association, along with other industry bodies, is urging New Delhi to engage in urgent diplomatic negotiations with the US administration. Options being considered include seeking a bilateral agreement to reduce or eliminate the tariff, pursuing a dispute resolution mechanism through the World Trade Organization (WTO), and exploring alternative trade routes.

However, the current geopolitical climate and the Trump administration's consistently protectionist trade policies present significant challenges. Some experts believe that a swift resolution is unlikely and that Indian exporters must prepare for a prolonged period of higher costs and increased competition.

Beyond immediate government action, the industry is also looking inward for solutions. Manufacturers are exploring strategies to mitigate the impact of the tariff, such as investing in automation to improve efficiency and reduce production costs, focusing on higher-value-added products that can command premium prices, and diversifying export markets beyond the US. There's also a growing emphasis on sustainability and ethical sourcing, hoping to appeal to US consumers increasingly conscious of these factors.

The textile sector is a cornerstone of the Indian economy, contributing significantly to both exports and employment - providing jobs for an estimated 50 million people, according to recent government figures. The 15% tariff poses a direct threat to this economic engine, and the coming months will be critical in determining the sector's resilience and its ability to navigate this challenging new landscape.