US tariffs trigger steep 13% drop in India’s textile and apparel exports in Oct’25

The imposition of steep US tariffs has dealt a sharp blow to India’s textile and apparel export sector, with October 2025 emerging as a particularly painful month. According to data from the Confederation of Indian Textile Industry (CITI), textile exports fell 12.92% y-o-y in October, dropping from $1,833.96 million in October 2024 to $1,596.99 million in October. In the same period, apparel exports declined by 12.88%, from $1,227.58 million to $1,069.42 million. Together, the combined textile and apparel exports in October stood at $2,666.41 million, down from $3,061.54 million a year earlier — a contraction of 12.91%.

This downturn comes in the wake of the US raising its tariff on Indian-origin goods from an initial 25% to 50% by late August. While the cumulative drop in exports for the April-October 2025 period is more modest — 3.54% for textiles and a slight 1.13% increase for apparel — the October shock underscores how sharply the new tariff regime has undercut export momentum.

The pain is not confined to raw numbers. A CITI-conducted survey of exporters reveals that one-third of textile and apparel firms report their US-linked business has shrunk by 50%.

Key causes include order cancellations, postponements, and lower volumes demanded by US buyers — tactics exporters say are being used to shift the tariff burden back onto them.

To stay competitive, many exporters are offering steep discounts (up to 25%) and are grappling with excess inventory, with 85% of respondents flagging stockpile build-ups. Liquidity stress is also mounting: 82% of firms are reporting an extended credit cycle, with payment periods stretching 3-6 months, putting further pressure on working capital. The broader fallout is already being felt in key manufacturing hubs: production has slowed, and stakeholders warn of job losses and unit shutdowns if urgent policy support does not arrive.

Gujarat, a major textile export hub (notably in Ahmedabad and Surat), is among the hardest hit. Industry leaders from the region have called the 50% tariff “unsustainable,” warning of severe cash-flow problems and calling on the government to provide cheap financing, export incentives, or other forms of relief.

CITI’s own press release, issued earlier in August, had already warned of the impending damage, urging the government to fast-track support measures for exporters. Without such interventions, many fear India could lose significant ground in the US market — especially as competitors like Bangladesh and Vietnam may be able to offer more competitive pricing in the face of India’s tariff-induced cost blow.

In summary, the doubling of US tariffs has inflicted a meaningful decline in both export volumes and exporter stability. With orders drying up, margins shrinking, and liquidity tightening, the Indian textile-apparel sector is under substantial stress — and October’s numbers make clear that the tariff’s impact is no longer just a risk, but a stark reality.