“It’s a welcome move, but still leaves a bitter taste in the mouth,” a garment manufacturer in Uttar Pradesh told The Secretariat. “It took us three decades to establish our presence in the US market. It was all undone in the past few months. How can we just get it back in a few days?” he lamented. 

Uncertainty, job loss, and sinking morale characterised the Indian Textile and Apparel (T&A) industry from August 2025, when US President Donald Trump levied astronomical tariffs. With no warning, this disrupted supply contracts and broke order cycles. Exporter confidence was eroded overnight as cancellations, delayed payments and high pressure became the norm.

The fallout wasn’t just an isolated gripe of a few exporters, but across the board. The US was India’s single largest textile and apparel market in 2024, accounting for nearly 28%–29% of exports valued at about $10.5 billion.

As buyers explored sourcing alternatives, manufacturers, especially MSMEs, which are more vulnerable to a volatile market, had to scale down operations, scramble to diversify, and even cut their losses by downsizing their workforce. 

Official social media announcements late last night could begin repairing a lot of the damage done. The newly announced India-US trade deal offers much-needed relief to exporters and perhaps a path to regain price competitiveness in what remains their single largest market despite diversification attempts. 

But the industry does not have amnesia. The episode revealed how quickly market access, painstakingly built over decades, could be unsettled, leaving exporters wary of the latest developments and the durability of trade relationships.

Devil Is In The Details

There are no two ways that the rollback has lifted sentiment across the T&A industry, but exporters caution that the real impact of the India–US trade deal will only be clear once the fine print is released. 

Detailed, product-wise tariff schedules and rules of origin are still awaited, and these will determine which segments of India’s textile and apparel exports benefit and which still remain vulnerable. 

The revised tariff regime does, however, place India in a relatively more competitive position vis-à-vis several of its key T&A export rivals. Indian goods will face an effective tariff of about 18%, placing them in a lower bracket than several competing exporters. Comparable tariffs are estimated at around 19% for Indonesia, 20% for Vietnam and Bangladesh, and about 34% for China, according to post-deal trade assessments. 

Analysis of the latest US Office of Textiles and Apparel (OTEXA) data, available till November 2025, reveals that US imports of textiles and apparel from India declined by 31.4% year-on-year. Despite this contraction, India remained the fourth-largest supplier of textiles and apparel to the US in 2025, with a market share of about 9.36% — higher than Bangladesh, Cambodia or Indonesia.

For manufacturers on the ground, the deal has so far acted more as a sentiment booster than an immediate order trigger. 

“If the orders indeed start coming in from the American market again, we are prepared to fulfil them,” the UP-based garment manufacturer said. “Our total orders had shrunk in the past few months, but it’s not like our capacity decreased. We were doing it before and we will in the future. The only thing that has changed for good is our anxiety. While we trust the Indian government, there is no telling what the US President will do next,” he told The Secretariat. 

Whether optimism translates into sustained order flows will depend on how quickly buyers regain confidence, how clearly the new tariff lines are communicated, and whether the stability promised by the deal holds long enough for trust to be rebuilt.

Braving Headwinds

While breaking into new markets isn’t possible overnight, the pressure on Indian apparel and textile exports forced manufacturers to rethink their supply chains. One viable solution that was gaining momentum was rerouting through Nepal. 

By shipping half-stitched garments and fabrics from India to Nepal, and bringing it all together in Nepal, Indian exporters sought to export finished goods to the US under significantly lower tariff regimes. But establishing new buyer relationships, logistics, warehousing, and compliance takes time. Now this need will diminish, once again pushing exporters to change their strategies.

In parallel, New Delhi moved to widen India’s export footprint by signing trade agreements with the EU, the UK, Oman, and New Zealand. 

“The new trade deal offers a chance to repair export shock, but success will require deeper supply-chain integration, diversified markets, and renewed buyer confidence,” a supply chain consultant with a textile exporter told The Secretariat.

When US President Donald Trump imposed the tariff late last year, Indian textile stocks were some of the worst hit. These included Gokaldas Exports Ltd., Welspun Living Ltd., KPR Mill Ltd. and Indo Count Industries Ltd., among others. Now, with a trade deal announced late Monday night, these stocks have surged as much as surged as much as 20%. 

This development is expected to give a strong boost to apparel exports, attract fresh investments across the value chain, and reinforce India’s position as a reliable global sourcing hub. Most importantly, the apparel sector being one of the largest employment generators, this positive move will help secure existing jobs and create substantial new employment opportunities, particularly for women and the workforce in labor-intensive segments

— A. Sakthivel, Chairman, Apparel and Export Promotion Council (AEPC)

The tariff rollback may stop the fabric of the textiles and apparel sector from tearing further, but whether it can be rewoven into a stable trade relationship remains to be seen. Just as President Trump ended his trade deal announcement, “Thank you for your attention to this matter!”