India–US Trade Agreement Set to Transform Textile Exports, Boost Competitiveness

The Ministry of Textiles has welcomed the landmark agreement between India and the United States as a major catalyst for strengthening bilateral textile trade relations, with industry leaders calling it a potential economic game changer for India's textile and apparel sector.

The agreement is expected to unlock significant export opportunities for Indian manufacturers by improving market access, enhancing competitiveness, and reshaping sourcing dynamics in the global textile value chain.

Access to $118 Billion US Import Market

For India's textile exporters, the deal opens up access to the United States' massive global imports market worth nearly $118 billion, covering textiles, apparel, and made-ups.

The US is already India's largest export destination, accounting for around $10.5 billion in textile exports.

Export composition includes:

• Nearly 70% apparel

• Around 15% made-ups

With this agreement, India is poised to significantly expand its footprint in the world's most valuable consumer market.

Key Driver for India's $100 Billion Textile Export Target by 2030

The agreement is expected to play a pivotal role in helping India achieve its ambitious target of $100 billion textile exports by 2030.

The Ministry noted that the US alone could contribute to more than one-fifth of this goal, providing the momentum needed for rapid scale-up in exports and manufacturing.

Reciprocal Tariffs to Remove Competitive Disadvantage

A major breakthrough under the agreement is the introduction of an 18% reciprocal tariff on all textile products, including apparel and made-ups.

This will remove the disadvantage Indian exporters previously faced and place India in a stronger competitive position than several key rivals:

• Bangladesh: 20%

• Vietnam: 20%

• Pakistan: 19%

• China: 30%

Industry experts believe this shift will alter global market dynamics, prompting major international buyers to reassess sourcing strategies in favour of India.

Cost Competitiveness and Supply Chain Diversification

The agreement will also enable Indian manufacturers to diversify risks and strengthen cost competitiveness by sourcing textile intermediates from the US.

This is expected to:

• Support manufacturing of higher value-added textiles in India

• Expand production capabilities

• Diversify export baskets

• Strengthen supply chain resilience

Employment Growth and Increased Investment

The Ministry highlighted that the deal is likely to generate substantial additional employment across the textile value chain, from spinning and weaving to garments and technical textiles.

It is also expected to encourage greater investments by US entities into India's textile ecosystem, further boosting technology transfer and industrial expansion.

A Strategic Opportunity for India's Textile Sector

Overall, the India–US textile agreement is being seen as a transformative step that will enhance India's global competitiveness, accelerate export growth, and strengthen bilateral economic cooperation.

With improved tariff positioning, expanded market access, and new investment potential, the deal could mark a turning point in India's journey toward becoming a global textile manufacturing hub.