India, once a close trading partner of the United States, is now facing one of its most significant trade threats under Trump’s new tariff regime in August, with tariffs reaching a record high of 50%. This change in the tariff system is severely impacting various Indian commodity exports to the U.S., especially the textile industry, which is the largest export market.
As per the Apparel Export Promotion Council (APEC), there are concerns that this move could be the death knell for thousands of small and medium-sized manufacturers across India. As the global trade landscape shifts and protectionism increases, Indian exporters are being forced to face some difficult realities. Let’s take a look at the dynamic market insights.
How Do Trump Tariffs Hit the India Textile Export?
The U.S. decision to impose a 50% import duty on Indian garments is part of a broader strategic effort to shield domestic textile producers while putting pressure on major apparel exporters like India, Bangladesh, and Vietnam. But, the condition of Indian suppliers is on the edge, because they –
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- Operate on razor-thin margin
- Depend heavily on U.S. buyers (40%+ of total Indian apparel exports go to the U.S.)
Considering the worst impact of tariffs, the Apparel Export Promotion Council has warned that thousands of units may shut down. However, strategic planning and trusted apparel trade partners outside of the U.S. market can help businesses mitigate the impact. Let’s understand a series of other events that affect India textile exports:
- Historical trade data for analysis of alternative market growth and projections.
- Shipment records for a better understanding of how goods flow across the continent.
- Connect with top business partners across various industries and the world.
India Textile Export to the United States
Over the years, India Textile export has covered a significant portion of the American market; for instance, one-third of the US apparel shipments come from India. This makes India the fourth-largest supplier to the US. However, with up to 50% tariffs pressuring Indian MSMEs and prompting fears of a sourcing shift to Vietnam and Bangladesh. Here’s a quick snapshot of India and U.S. bilateral trade –
- India’s total textile exports (Knitted 10% or not Knitted 12%) to the U.S. significantly increased in Q1 of 2025, compared to Q1 of 2024.
- In Q1 of 2025, both knit and non-knit apparel exports increased by $83.3 million & $50 million, respectively, compared to Q4 of 2024.
| Commodities | 2024 Q1 | 2024 Q2 | 2024 Q3 | 2024 Q4 | 2025 Q1 |
| Knitted Apparel | 788.8 | 6,32.7 | 562.1 | 608.6 | 872.1 |
| Not Knitted Apparel | 597.7 | 6,52.7 | 719.1 | 620.1 | 670.1 |
Value USD Million**
Top Five India’s Apparel Export Destinations
For a long time, India’s apparel export have been a key part of its economy, with the United States traditionally being the largest market. Major Indian textile hubs such as Tiruppur in Tamil Nadu, and states like Andhra Pradesh, Telangana, Gujarat, and Haryana, drive the production and export of ready-made garments, contributing billions in trade annually.
However, the U.S.-imposed tariffs are affecting Indian textile exports to the United States. This pushes Indian suppliers, especially MSMEs, to explore alternative markets in emerging markets for sustaining the sector’s growth. Let’s take a look at India’s top apparel export destination –
- In 2024, the U.S. imported apparel (knitted and not knitted) worth $1.5 billion from India.
- The UK, UAE, and Germany are the top buyers of Indian apparel, worth $458, $347, and $262 million, respectively, in 2024 after the U.S.
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| Countries | Knitted Clothes | Not Knitted Clothes |
| US | 670 | 872 |
| UK | 174 | 284 |
| UAE | 174 | 173 |
| Germany | 131 | 131 |
| Netherlands | 112 | 133 |
Value USD Million**
To protect the interests of local textile manufacturers against Trump’s tariffs, the Indian government took several steps to mitigate the impact of unilateral sanctions. Let’s understand them step by step –
How Does India Respond to Trump’s 50% Tariffs
The Indian government has raised the issue diplomatically, and a formal trade retaliation is unlikely in the short term, given the delicate U.S.-India strategic ties. However, several policy countermeasures are under consideration –
- Self-Reliance: The Indian government has urged citizens and businesses to adopt “Swadeshi”, favouring domestically made products to strengthen India’s self-reliance in the face of rising protectionism globally.
- Rejection of tariffs and Sanctions: India strongly condemned the extra 25% penalty (On top of an initial 25%), labelling the measure “Unfair, unjustified, and unreasonable.” It pointed out that other nations continue trading with Russia without facing similar penalties, emphasising the need for energy security.
- Monetary cushion for economic fallout: The Reserve Bank of India implemented micro and macro-level measures with neighbouring countries. This measure promotes trade settlement in local currencies and bolsters efforts to internationalise the rupee.
- Structural Realignment: To reduce U.S. unilateral pressure on suppliers, the Indian government implemented a series of structural policy changes. This includes exploring tariff rebates and subsidies, and expediting free trade agreements with the EU, UK, and ASEAN. Additionally, it aims to diversify markets, decrease dependency on the U.S., and protect exporters from tariff barriers.
- Industry-Specific Support: India introduced targeted industry relief by offering 10-15% credit guarantees for SME and exporters’ loans under the SMA (0-90 days overdue) category. This reassures banks and ensures liquidity for sectors like textiles, jewellery, and chemicals. Additionally, interest subsidies aim to lower financing costs for MSMEs and boost their competitiveness abroad.
How Businesses Can Mitigate the Impact of Trump’s 50% Tariffs on India
In this volatile market, resilience and adaptability will separate survivors from casualties. Here are a few strategies for exporters and SMEs –
- Alternative Market: Indian textile suppliers, with the help of Market Inside trade data, can explore non-traditional markets such as the UAE, Latin America, Africa, and ASEAN nations that offer easier trade access.
- Focus on Sustainable Fashion: Using a trade intelligence platform, suppliers can identify the demand-driven region for Eco-conscious apparel, like Europe and Japan. They can also analyze the supply chain network to understand competitors’ steps.
- Invest in Trade Intelligence Tools: Use global trade data APIs and service providers to track shifting buyer trends, identify new demand centers, and negotiate smarter contracts.
Conclusion –
The 50% U.S. tariffs are not just a trade barrier; they’re a wake-up call. India must rethink its apparel export strategy, especially when global trade is being reshaped by geopolitical, technological, and climate policies.
To support and thrive India textile export, stakeholders, from policymakers to entrepreneurs, must collaborate, innovate, and accelerate diversification. Otherwise, the sector that clothes the world may find itself unraveling at home.
Frequently Asked Questions
- Top 10 textile exporting countries by export value.
As per textile export data, the top 10 textile exporting countries are China, Bangladesh, Vietnam, Turkey, India, Italy, Germany, the United States, Pakistan, and Spain.
- Top Textile Manufacturing Countries
As per the textile export-import data, China, India, Turkey, Bangladesh, and Vietnam are the top textile and apparel manufacturers in the world.
- Who is the biggest exporter of textiles?
China is the biggest exporter of textiles in the world, leading by a wide margin in both value and volume.