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Textile Industry Seeks Urgent Govt Aid to Counter US Tariff Impact

The Indian textile and apparel sector has presented policy recommendations to the government to counter economic pressures from high US tariffs. Key demands include expediting the India-UK trade agreement and creating a new export incentive scheme. The industry also seeks extended financial relief, including a moratorium on loan installments and increased credit support, until March 2026. These measures aim to overcome barriers like high logistics costs and stabilize export performance.

Key Points: Indian Textile Industry Urges Policy Measures Against US Tariffs

  • Fast-track India-UK trade pact
  • Dedicated export incentive scheme
  • Extend financial relief to March 2026
  • Increase interest subvention to 5%
2 min read

Textile industry urges for measures to mitigate US tariff impact: CITI Survey

CITI survey reveals industry demands for trade pacts, financial relief, and export incentives to mitigate the impact of steep US tariffs and stabilize exports.

"The industry is seeking an extension of current relief measures... until at least March 31, 2026."

New Delhi, January 28

The Indian textile and apparel industry has approached the government with a comprehensive set of policy recommendations to counter the severe economic headwinds caused by steep US tariffs, post the second round of a survey conducted by the Confederation of Indian Textile Industry in December 2025.

Although the Free Trade Agreement with the European Union has brought much-needed relief to exporters, the demand emerging from the CITI survey is for the government to fast-track the implementation of the India-UK Comprehensive Economic Partnership Agreement (CETA).

To further enhance market reach, the CITI survey highlights an industry request for a dedicated handholding scheme, similar to the Focus Market Incentive Scheme, which would provide duty support to exporters to offset the duty disadvantages they face in new international markets.

The survey also outlines critical financial interventions requested by industry stakeholders to sustain operations during this transition.

The industry is seeking an extension of current relief measures, including the moratorium on installments, recalculation of drawing power, and credit support, until at least March 31, 2026, with the benefits covering the entire textile value chain, including Tier 2 and Tier 3 exporters. Furthermore, the CITI survey notes a call to increase the interest subvention rate from the current 2.75 per cent to 5 per cent under the recently announced Interest Subvention Scheme.

To address liquidity concerns, the industry has also requested a 30 per cent extension of collateral-free loans under the Emergency Credit Line Guarantee Scheme (ECLGS), similar to the support provided during the pandemic for both MSMEs and larger corporations.

The CITI survey identifies high logistics costs, limited market knowledge, and payment-related risks as the primary barriers currently slowing this transition. By addressing these constraints through the proposed policy measures, the industry aims to move beyond the current period of uncertainty and stabilise its export performance heading into 2026.

- ANI

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Reader Comments

R
Rohit P
Finally, the industry is speaking with one voice through CITI. The request for extending credit support and increasing interest subvention to 5% is critical. My uncle's weaving unit is struggling with cash flow. Without these measures, many MSMEs will not survive 2026.
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David E
As someone who sources from India, the high logistics costs are a real issue that makes Indian textiles less competitive against Bangladesh and Vietnam. Streamlining port procedures and reducing inland freight charges should be a top priority alongside these financial packages.
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Ananya R
Good to see a comprehensive plan. But I hope the benefits truly reach the Tier 2 & 3 exporters and aren't just absorbed by the big players. The collateral-free loan extension is a lifeline. Jai Hind to our textile workers! 🇮🇳
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Siddharth J
While support is needed, the industry also needs to look inward. We must improve productivity and move up the value chain to branded apparel. Over-reliance on government sops is not a long-term strategy. Let's use this crisis to become more efficient and innovative.
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Kavya N
The mention of payment-related risks is so true! Many small exporters face huge delays in payments from international buyers, which cripples their operations. A government-backed payment security mechanism would be a game-changer. Hope the authorities are listening.

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