U.S. Tariff Cut Might Benefit India's Textile Exporters

The United States has lowered the tariffs it charges on Indian goods to 18%, which has an effect on India's textile and clothing exports, which make up a large part of trade between the two countries.

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U.S. President Donald Trump announced the tariff reduction on February 02 following a phone call with Prime Minister Narendra Modi. “We agreed to a trade deal between the United States and India, whereby the United States will charge a reduced reciprocal tariff, lowering it from 25% to 18%,” Trump said in a social media post.
Prime Minister Modi acknowledged the announcement on X, thanking the U.S. President for the decision.

Textile Exports to the U.S.

India exported textile and apparel products worth nearly $11 billion to the United States in the financial year 2024-25, according to industry data. These exports accounted for close to 28% of India’s total textile and apparel exports during the year.

The tariff reduction applies to Indian goods exported to the U.S., including textile and apparel products, and follows recent discussions between the two governments on trade-related issues.

Impact on Domestic Industry

The development comes after a period of higher tariffs in the U.S. market, which had affected several textile hubs in India. Tiruppur, a major knitwear manufacturing centre, recorded losses of ₹15,000 crore in 2025 due to increased duties imposed earlier, according to industry estimates.

The tariff reduction changes the duty structure for Indian exporters supplying goods to the U.S. market.

Export Performance Metrics

According to data shared by the Indian Texpreneurs Federation (ITF), India’s monthly apparel export run rate currently stands at around $1.27 billion. The federation has stated that apparel and home textile shipments account for a significant share of India’s textile exports to the U.S., with the recent tariff revision altering the competitive positioning of Indian exporters in the American market.

Budget Steps for the Sector

The announcement of the tariff came at the same time as the Union Budget, which was presented on Sunday and included steps to help the textile and clothing industry. Official documents say that the budget laid out policy steps that would help make domestic manufacturing and exports more competitive.
These steps were announced before the tariff cut and apply to all units in the sector, both those that export and those that don't.

Export Targets

India’s textile and apparel exports were valued at $37.7 billion in FY25, according to official figures. Policy documents say that the government wants the sector to export $100 billion worth of goods by 2030.

The U.S. lowering its tariffs is just one of many recent trade changes that have affected the sector. Agreements have also been made with several trading partners.

The tariff decision made on February 2nd is a confirmed change in the terms of trade between India and the U.S. This will have an effect on textile and clothing shipments, which make up a large part of India's exports to the U.S.