Indian Textile Stocks Plummet as US Tariffs Reach 50%

Strategic Insights -

The US move to impose a 50% tariff on Indian textiles has sent shockwaves through the industry, with leading players such as KPR Mill and Gokaldas Exports seeing their share prices fall up to 3% in intraday trade. The Federation of Indian Export Organisations (FIEO) estimates that nearly Rs 72,000 crore worth of exports is now at risk, and industry job losses are feared. The US is India's largest buyer of textiles, and with tariffs now higher than those faced by rivals like China and Vietnam, there are concerns that buyers may start shifting orders to competing markets.

Key Takeaways:

  • The US tariff hike to 50% on Indian textiles has led to a significant decline in share prices of leading players such as KPR Mill, Gokaldas Exports, Trident, Vardhman Textiles, Arvind, and Welspun Living, with some experiencing falls of up to 3%.
  • The Federation of Indian Export Organisations (FIEO) estimates that nearly Rs 72,000 crore worth of exports is now at risk due to the tariff hike.
  • Indian textile hubs including Tiruppur, Surat, and Noida have begun halting or scaling down production after the US imposed a steep 50% import tariff on Indian garments and fabric.
  • The industry body has raised concern that more than half of India's US-bound shipment now faces a 30-35% cost disadvantage compared with rivals such as Vietnam and Bangladesh.
  • The US is India's largest buyer of textiles, and higher tariffs could directly affect nearly 55% of shipments.
  • The government has extended the exemption of import duty on cotton until December 31, 2025, to ease input costs for textile mills and exporters.
  • The government is also considering singing Free Trade Agreements (FTA) with more countries to soften the blow.

Statistics:

  • Rs 72,000 crore: Estimated value of exports at risk due to the tariff hike (FIEO)
  • 50%: US tariff on Indian textiles (effective August 27)
  • 3%: Maximum decline in share price of leading players such as KPR Mill and Gokaldas Exports
  • 55%: Percentage of India's US-bound shipment affected by the tariff hike
  • 30-35%: Cost disadvantage faced by Indian exports due to the tariff hike compared with rivals like Vietnam and Bangladesh
  • December 31, 2025: Exemption period for import duty on cotton extended by the government

Sources:

  • Federation of Indian Export Organisations (FIEO)
  • Indian Express Online Media Services Pvt. Ltd.
  • Contify.com