The sudden imposition of a 50% punitive US tariff has posed an unprecedented challenge to the Indian textile and clothing industry, which accounts for nearly 29% of total US textile and apparel imports. As the second-largest employment provider after agriculture, supporting over 110 million livelihoods, particularly the rural communities and women, the sector has traditionally depended heavily on the US market and was anticipating the early conclusion of a Bilateral Trade Agreement between the two Nations, which had been progressing on a fast track. The abrupt tariff hike has not only disrupted India’s manufacturing value chain but has also adversely impacted US consumers and importers through higher costs and supply uncertainties. Textile and clothing exports to the US, amounting to around USD 11 billion, account for nearly 29% of India’s total T&C exports, underscoring the market’s critical importance to the sector.
The industry is now poised to achieve a sustained double-digit growth rate in the coming years, aligned with the Hon’ble Prime Minister’s vision of building a Viksit Bharat by 2047. With strong policy support, enhanced market access and continued investments, the textile and clothing sector aims to expand to a domestic market size of USD 1.8 Trillion and achieve export earnings of USD 600 Billion, positioning India as a global leader in the textile value chain.
In a press release issued here today, Mr. Durai Palanisamy, Chairman of SIMA, expressed his sincere gratitude and appreciation to the Hon’ble Prime Minister and the Hon’ble Minister of Commerce & Industry for successfully concluding two landmark trade deals within a week, in addition to announcing game-changing policy measures for the textile industry in the recent Union Budget 2026–27.
Mr. Durai has stated that exporters predominantly dependent on the US market, particularly those 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 has further noted that US buyers began shifting their 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.
Mr. Durai has also thanked the Hon’ble Chief Minister of Tamil Nadu for recommending the industry’s concerns to the Hon’ble Prime Minister and for extending full support toward securing an amicable trade deal with the United States.
Mr. Durai has appreciated the unstinted efforts of the Hon’ble Prime Minister, the Hon’ble Minister of Commerce & Industry and the Hon’ble Minister of Textiles for their proactive engagement in persuading the US President to roll back the punitive tariff. He has further noted that the reduction of the tariff to 18% would significantly enhance the global competitiveness of Indian textile exports and restored confidence across the industry.
SIMA Chairman stated that the 18% tariff is the lowest rate negotiated by any T&C export competing country with the United States, reflecting the Government of India’s strong diplomatic and trade efforts. He noted that India has successfully concluded trade agreements with three major global economies and markets (i.e) the US, the UK and Europe, apart from several other countries and is steadily moving towards securing preferential or free market access across most 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.
The sudden imposition of a 50% punitive US tariff has posed an unprecedented challenge to the Indian textile and clothing industry, which accounts for nearly 29% of total US textile and apparel imports. As the second-largest employment provider after agriculture, supporting over 110 million livelihoods, particularly the rural communities and women, the sector has traditionally depended heavily on the US market and was anticipating the early conclusion of a Bilateral Trade Agreement between the two Nations, which had been progressing on a fast track. The abrupt tariff hike has not only disrupted India’s manufacturing value chain but has also adversely impacted US consumers and importers through higher costs and supply uncertainties. Textile and clothing exports to the US, amounting to around USD 11 billion, account for nearly 29% of India’s total T&C exports, underscoring the market’s critical importance to the sector.
