The increase in tariffs, which now includes a 25% levy effective from yesterday and an impending additional 25% at the end of the month, is set to cause significant disruptions in India’s export of apparel to the United States. Retail giants are refusing to bear these added costs, leading to potential large-scale financial losses.
This decision was communicated to Indian suppliers via emails and letters, requesting a halt on the shipment of apparel and textiles “until further notice,” as reported by Indian exporters.
The Tiruppur Exporters’ Association (TEA) president, A. Sakthivel, confirmed the suspension of production for the U.S. market to the media. “We have decided to halt production of orders for the U.S. until there is clarity,” he stated.
This reaction aligns with the Indian Textile Industry Confederation (CITI), which described the tariff as a “huge setback” that will “significantly weaken” the industry’s competitive edge.
India stands as the fourth largest apparel exporter to the United States with a 6% market share. This figure, while having grown in recent years, still lags behind major Asian competitors: China, which dominates at 21%, and Vietnam at 19%.
The new U.S. tariff of 50% on imports from India places the country at a disadvantage compared to nations facing tariffs of 20% to 30%.
The official U.S. rationale cites India’s purchase of Russian oil as the reason for the tariffs, but in New Delhi, it is viewed as a pressure tactic to resolve the stalled U.S.-India Bilateral Trade Agreement (BTA).
Key points of contention include India’s “red lines,” such as its refusal to open up its markets to U.S. agricultural and dairy products, aimed at protecting millions of Indian farmers.
