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The study assesses the effects of recent US trade tariffs on India's textile sector and explores resultant economic implications.

May 9, 2026Open Access

Impact of Trade Tariffs by the United States of America on Commodity Markets in India-With Special Reference to Textile Sector

Key Points

The study assesses the effects of recent US trade tariffs on India's textile sector and explores resultant economic implications.
Analyzed changes in Indian textile exports following a 50% tariff increase by the US effective August 27, 2025.
Investigated share price impacts of major Indian textile companies post-tariff implementation.
Reviewed responses and countermeasures proposed by Indian textile industry organizations.
Notable declines in share prices of key Indian textile companies such as Vardhman Textiles and Welspun India.
A significant 8.2% contribution of the textile and apparel industry to India's total merchandise exports in FY 2023-24.
Urgent calls for diplomatic engagement from CITI and AEPC to mitigate trade tensions.

Abstract

The United States of America recently raised tariffs on Indian textiles and apparel to a steep 50% tariff, effect from August 27, 2025, in response to India's ongoing oil imports from Russia. This marks one of the most significant trade actions against India in recent years. Indian exports of knitted and woven garments, madeups (home textiles), and carpets are the primary categories impacted. These sectors account for a major chunk of India's textile exports. By taxing these key items, the United States of America is targeting the core of India's textile earnings, which could be a much harder blow to the economy. The major textile industries of India like Vardhman Textiles Limited, Welspun India, Arvind Fashions Pvt Ltd, Nitin Spinners Limited, Pearl Global, etc have seen notable declines in their share prices. India is amongst the world's largest economies and top textile exporters. The textile and apparel industry makes up about 8.2% of the nation's total merchandise exports in FY 2023-24. Globally, India holds a 3.9% share in the total trade of textiles and apparel. While Indian textile exports are diversified across multiple international markets, the United States of America was one of its most important markets. The United States of America is especially important for India's ready-made garment (RMG) exports, and the dependence goes both ways. Disruption in the imports impacts manufacturing, employment, and forex inflows. Confederation of Indian Textile Industry (CITI) and the Apparel Export Promotion Council (AEPC) have reacted to the issue and urged the government to engage diplomatically to ease tensions and might roll out measures to neutralise the impact. If the situation doesn't improve soon, it could bring real pressure for factories, jobs, and investor confidence. The present study analysis the impact on Textile Industry and the countermeasures being taken by the Government to regularise this Commodity Market

Impact of Trade Tariffs by the United States of America on Commodity Markets in India-With Special Reference to Textile Sector

Key Points

Abstract

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