India's Tariff-Hit Textile Sector Pins Hopes Of Revival On Export Promotion Mission

Confederation of Indian Textile Industries (CITI) Chairman Ashwin Chandran says that EPM should be rolled out by the end of the year, as it would boost the morale of Indian exporters grappling with the tariff uncertainty. “It can also address the structural challenges, helping India raise its share in global trade, including in the textile and apparel sector,” said Chandran. 

The demand has come in the aftermath of a 10.34 per cent decline in textile and apparel exports in September 2025, as compared to September 2024. Despite the frontloading of shipments to the US ahead of the announcement of 50 per cent tariffs, India’s overall textile and apparel exports dropped marginally in the first half of the current fiscal (2025-26).

The Impact On MSMEs

The bulk of India’s textile and apparel sector comprises micro, medium, and small enterprises (MSMEs). According to CITI's analysis, in September 2025, Indian textile exports slid to $1,624.06 million, a dip of 10.45 per cent, against $1,813.63 million in the previous year, while apparel exports declined by 10.14 per cent (to $997.54 million), as compared to $1,110.15 million in the previous year.

The cumulative exports of textiles and apparel items during September 2025 saw a decline of 10.34 per cent to $2,621.60 million, as compared to $2,923.78 million in September 2024.

Navigating The US Tariff Hurdle

On August 27th, the US imposed a 50 per cent tariff on Indian goods. In July, India signed the Comprehensive Economic and Trade Agreement (CETA) with the UK. India is also currently negotiating multiple free trade agreements (FTAs), including with the EU.

Last year, India was the sixth largest exporter of textile and apparel items worldwide. India has close to a four per cent share of the global trade in textiles and apparel products.

According to the Federation of Indian Exporters Organisation (FIEO), textiles and apparel — worth about $10.8 billion — face tariffs ranging from 59 per cent to 64 per cent, making them extremely uncompetitive against global suppliers such as Vietnam and Bangladesh. These are highly price-sensitive, labour-intensive industries dominated by MSMEs, and, so, the tariffs could cause a steep decline in export volumes and lead to job losses in major hubs such as Tiruppur. 

Tiruppur Units Hit By US Tariffs

Industry sources say that close to 35 per cent to 40 per cent of units in Tiruppur depend largely on orders from the US. Production of these units has come to a standstill, affecting nearly seven lakh workers in the Tiruppur hub (about 60 per cent of them are from Tamil Nadu, while the rest are mainly from Bihar, Uttar Pradesh, Jharkhand and Odisha).

Interestingly, many of these workers, who left for their native place ahead of Diwali, have not returned. M.P. Muthurathinam, president, Tirupur Exporters' and Manufacturers' Association (TEAMA), told The Secretariat that close to 50 per cent have returned. “Many may have stayed back because of the elections in Bihar,” he said. 

Meanwhile, FIEO, which is working with various stakeholders to boost exports, has requested a five per cent interest subvention and other liquidity support in view of delays and tariff‐related payment issues. FIEO president S.C. Ralhan told The Secretariat, “FIEO works in coordination with Export Promotion Councils (EPCs) and industry associations. Through trade missions, virtual buyer‐seller meets, overseas trade fairs, linking exporters with buyer forums, it is promoting value-added products and encouraging diversification of markets beyond the US.”