industry

Textiles companies watchful of incentives by other nations to cushion US tariffs


US President Donald Trump’s tariff fury has offered India an unlikely advantage in textile exports over rival exporting nations. Trump slapped India with 27% reciprocal tariffs though it is lower than Vietnam’s 46%, Bangladesh’s 37%, Cambodia’s 49% and Pakistan’s 30%-all major textile exporters.

Domestic exporters however fear that countries facing higher tariffs may introduce incentives to cushion the impact and keep their production costs lower to retain their retain market shares in the US.

“We have to see what incentives they (other countries) offer to the textile and apparel sectors. For instance, Bangladesh, whose most of the GDP comes from the textile and apparel sector, may come up with incentives to absorb the cost increase,” said B. K. Goenka, chairman of Welspun Group and a textile exporter to the US. “The next 7 -10 days are crucial as all the nations will try to negotiate and renegotiate to keep their export volumes intact. It has to be seen how the US consumers react to the rising prices.”

Textile producers expect the US to go slow on short-term orders hoping that Washington would opt to exhaust its existing inventory including those in the pipeline as countries start tariff renegotiations. However, India will be the preferred destination for sourcing textiles and clothing as other major textile exporting countries are subject to higher rates except the European Union.

Textile producers however say they do not have ample spare capacity to ramp up production and meet a potential increase in orders.


The prevailing uncertainty makes it vital for Indian exporters to explore alternative global markets to sustain and enhance trade volumes, said textile trade executives.Poorna S, director of Shahi Exports, one of the leading apparel manufacturers and exporters expects a consumer backlash once garment prices rise in the US. “There will be further negotiations and renegotiations. Everybody will be in a wait-and-watch mode now. But definitely India is a better position,” he said.

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