How back-to-back deals put India's apparel exporters on a new high

India’s textile and apparel industry is riding a surge of adrenaline that few insiders can remember feeling this intensely in a long, long time.

“Zero to 350 kmph in four seconds—full throttle,” said Kishan Daga of Concepts N Strategies, capturing his excitement as the news of India–US trade deal flashed across television screens.

Daga’s metaphor captured the mood perfectly: disbelief giving way to exhilaration, caution melting into confidence, and an industry long held back by tariff headwinds suddenly finding a clear road ahead.

For months, Indian apparel exporters had been navigating a bruising environment in the United States, burdened by a punishing 50 per cent tariff regime—25 per cent reciprocal duties layered with another 25 per cent linked to energy trade with Russia.

Margins were squeezed, orders were under pressure, and comparisons with tariff-advantaged competitors were unavoidable. The announcement that the US would slash tariffs on Indian goods to around 18 per cent has therefore landed like a release valve. Relief, optimism, and ambition are now flowing through India’s apparel hubs almost simultaneously.

Industry players maintained that an 18 per cent tariff will put India at a much stronger competitive advantage vis-à-vis Vietnam, Bangladesh, China, Pakistan, and Indonesia.

For the first time in years, Indian exporters are talking not merely about retaining orders but about winning share. Sourcing conversations are already changing tone, and several manufacturers believe the next two years could mark a decisive inflection point. Some estimate that with the key deal in place and US sourcing momentum building, monthly double-digit export growth in 2026–27 is no longer a stretch goal but a realistic possibility.

“The agreement comes at a critical time for the apparel industry, which has been under immense pressure due to the earlier 50 per cent US tariff,” said Dr A Sakthivel, chairman of the Apparel Export Promotion Council, adding, “The breakthrough in the India–US trade negotiations is a highly welcome and timely development. The United States is our single largest export market, and improved trade terms will significantly enhance the competitiveness of Indian apparel products in the US market.”

For exporters who have watched buyers drift toward lower-duty destinations, Sakthivel’s words echo a shared sense of vindication.

“For the textile industry, this move is especially timely. Lower US tariffs on Indian goods, combined with India’s steps toward easing import duties on cotton, can create a genuine win-win situation,” opined Gautam Ganeriwal, executive director at Sitaram Spinners Pvt Ltd, while adding that continued dialogue and reciprocal market access will strengthen India-US textile trade and set an example of how natural allies can work together toward shared prosperity.

What has amplified the euphoria is timing! The US breakthrough comes close on the heels of India’s trade deal with the European Union—widely dubbed by industry insiders as the “Mother of all Deals”—and amid growing expectations around the Comprehensive Economic and Trade Agreement (CETA) with the UK.

Taken together, these back-to-back developments have injected rare optimism into a sector that has often felt like it was running uphill despite having world-class raw materials, design capabilities, and manufacturing depth.

“The 18 per cent US tariff, paired with the EU FTA, is a turning point that ends industry uncertainty - it is the ultimate ‘unlock’ for the PM MITRA vision. While the policy created the capacity, this deal provides the global competitiveness needed to fill it,” opined Dharani Kanth Koganti, director of Kakatiya Mega Textile Park (KMTP), Telangana.

Daga reiterated that the tariff reset with the US alone has redrawn the sourcing map. “India is now more competitive than Bangladesh and Vietnam, both hovering around 20 per cent, and significantly ahead of China, which continues to face effective tariffs of 30–35 per cent on apparel entering the US,” maintained the founder anchor of consulting service provider Concepts N Strategies

In an industry where even a two- or three-percentage-point duty difference can swing sourcing decisions, this shift is nothing short of transformative.

History, Daga notes, clearly underscores the decisive impact of tariff alignment. Bangladesh’s meteoric rise in the early 2000s was driven less by deep vertical integration and more by preferential access and low duties, he held.

Vietnam also followed a somewhat similar playbook after sealing trade agreements with the US and then the EU, scaling apparel exports from reportedly under $5 billion in 2005 (according to some estimates), to well over $35 billion by the early 2020s.

Meanwhile, India, despite its strengths across cotton, yarn, fabric, design, and value-added manufacturing, often found itself losing out at the final pricing stage because of duty disadvantages.

That long-standing handicap now appears to be fading.

Manufacturers on the ground are already looking ahead. N Thirukkumaran, chairman of Tiruppur-based Ess Tee Exports India Pvt Ltd, believed the coming years could be extraordinary.

“With India now among the most competitive in Asia on the tariff front, the textiles and apparel sector is expected to grow by leaps and bounds,” he said while underlining that once the European Union and the United Kingdom deals come into effect, he expects apparel exports to double over the next three years.

Beyond the numbers, there is a palpable psychological shift. Exporters speak of renewed confidence in investing, expanding capacities and moving up the value chain, even as buyers, too, are reassessing India not just as a reliable alternative but as a strategic sourcing destination with scale, compliance and improving cost competitiveness.

The convergence of deals with the US, EU and UK has created a sense that India’s moment may finally be arriving.

Challenges, of course, remain—from logistics and lead times to sustainability and compliance expectations. But for an industry accustomed to fighting uphill battles, the alignment of global trade winds feels unprecedented. As one exporter put it privately, “For the first time in a long while, we are not explaining why India is expensive. We are explaining why India makes sense.”

If the momentum holds, the coming years could mark a defining chapter for Indian textiles and apparel. With tariffs easing, markets opening and confidence roaring back, the industry appears ready to keep its foot firmly on the accelerator once again.

Fibre2Fashion News Desk (DR)