- US accounts for nearly 30% of India’s apparel exports
- Exporters’ revenues drop by nearly 40-50% post tariffs
India’s apparel and textile exports are facing renewed pressure after fresh tariff threats from the United States, adding to the impact of higher duties imposed since August 2025. The US remains India’s largest apparel market, accounting for nearly 30% of total textile and garment exports, making any tariff disruption structurally important for the industry. Before the tariff escalation, India’s apparel exports to the US were valued at around USD 4.7 billion in calendar year 2024, with knitwear contributing about USD 2.14 billion and woven garments around USD 2.53 billion, reflecting a stable and diversified export base.
In early 2025, before the tariff impact became visible, exports to the US were still showing resilience. During April-July 2025, Indian apparel shipments to the US recorded growth as buyers placed advance orders amid tariff uncertainty. However, this trend reversed sharply after the first tariff hike in August 2025. Following the initial increase, export momentum weakened, and by September-November 2025, when the effective tariff reached close to 50%, exporters reported revenue declines of nearly 40-50% on US-bound shipments, largely due to heavy discounting, order delays, and partial cancellations.
This shift is significant because apparel exports operate on thin margins, and steep tariffs quickly erode India’s price competitiveness against suppliers such as Bangladesh and Vietnam. Export-oriented hubs such as Tiruppur, which depend heavily on US buyers, have already seen lower capacity utilisation. The pressure has gradually moved backward along the value chain, affecting spinning millers, as weaker garment exports reduce fabric and yarn offtake. Mills supplying export-linked units are facing slower order flows and longer inventory cycles, even as domestic cotton availability remains adequate.
Outlook
Looking ahead, continued tariff uncertainty or any further escalation could accelerate order diversion away from India, keeping US-bound apparel exports subdued in 2025-26. While exporters may attempt to diversify toward Europe, the UK, and West Asia, these markets are unlikely to fully offset the scale of US demand in the short term. For ginners and brokers, this implies that cotton demand linked to exports may remain cautious, limiting price upside despite stable supplies. Until tariff clarity improves, the textile and cotton markets are likely to trade with a defensive bias, driven more by domestic consumption than export pull.
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