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Key Points

Indian textile exporters are facing severe challenges due to new US tariffs. The 50% additional tariff has caused massive order cancellations and forced deep discounts. Nearly one-third of companies have seen their turnover drop by over half since the tariff implementation. The industry is now seeking urgent government intervention including loan moratoriums and raw material reforms to stay competitive.

Key Points: US Tariffs Severely Hit India Textile Exporters CITI Survey

  • 85% of firms face inventory buildup due to declining US orders
  • Two-thirds forced to offer 25% discounts to retain American buyers
  • 82% report extended credit cycles worsening liquidity pressures
  • Industry seeks loan moratorium and raw material import reforms
  • India faces 50% tariff versus 20% for Bangladesh and Vietnam
  • Exporters urge FTAs with EU and financial relief packages
2 min read

US tariffs severely hit India's textile exporters; industry seeks moratorium, raw material reforms: CITI survey

50% US tariffs cause 30% turnover decline, inventory buildup, and liquidity crisis for Indian textile exporters seeking government relief measures

"Nearly one-third of the respondents reported a turnover decline of more than 50 per cent following the tariff increase - CITI Survey"

New Delhi October 13

India's textile and apparel exporters are facing severe disruptions following the United States' imposition of a 50 per cent additional tariff, according to a nationwide survey conducted by the Confederation of Indian Textile Industry (CITI).

The survey revealed that the US, which accounts for India's 28 per cent of total textile and apparel shipments, has become significantly less accessible due to the steep tariff structure, eroding India's export competitiveness.

Nearly one-third of the respondents reported a turnover decline of more than 50 per cent following the tariff increase. The major contributing factors included requests for price discounts from US buyers (30%), order cancellations or postponements (25%), and a reduction in order volumes (20%).

Around 85 per cent of the firms reported inventory build-up due to declining orders, while two-thirds were compelled to offer discounts, mostly around 25 per cent, to retain business in the US market.

Liquidity pressures have intensified sharply, with 82 per cent of respondents citing extended credit cycles, and more than half reporting an increase of three to six months. Around 40 per cent noted that their working capital requirements had risen by over 30 per cent, reflecting severe cash flow challenges across the value chain.

More than half of the respondents urged the government to announce a moratorium on repayment of existing loans, while 42 per cent recommended collateral-free loans to ease the financial burden.

About 50 per cent of the surveyed also sought measures to improve raw material competitiveness by removing import barriers such as Quality Control Orders (QCOs), import duties, and other restrictions.

The survey highlighted a series of policy suggestions, it includes fast-tracking Free Trade Agreements (FTAs) with key global markets such as the EU and providing interest subvention and financial relief to the industry to address liquidity constraints. CITI also asks for introducing a Focus Market Incentive Scheme for US-bound exports and educing corporate income tax or granting tax holidays to help ease the financial crisis.

India currently faces the highest tariff rate among major textile-exporting nations, 50 per cent, compared with 20 per cent for Bangladesh and Vietnam, 19 per cent for Indonesia, Pakistan, and Cambodia, and 15 per cent for Turkiye and the EU.

CITI has called on the government to take urgent measures to safeguard employment, support exporters, and restore competitiveness in the textile and apparel industry. The body said it would continue to engage with policymakers and stakeholders to push for targeted relief.

- ANI

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Reader Comments

R
Rohit P
Why are we paying 50% tariff when Bangladesh pays only 20%? This is unfair trade practice by US. Our exporters are being punished for no reason. Government should negotiate better terms or impose counter-tariffs.
A
Ananya R
My uncle works in a textile export unit in Surat. They've already laid off 30% workers. The liquidity crisis is real - companies can't even pay salaries on time. Hope the government listens to CITI's recommendations. 🙏
M
Michael C
While I sympathize with the industry, we also need to acknowledge that our raw material policies need reform. Removing import barriers on quality materials could actually make us more competitive in the long run.
S
Sarah B
Time to diversify our export markets! Why are we so dependent on US? We should focus more on EU, Middle East and African markets. The FTA with EU has been pending for too long - government should fast-track this.
K
Karthik V
The 85% inventory build-up figure is alarming. This will lead to massive losses for small and medium enterprises. Immediate working capital support is crucial to prevent bankruptcies across the sector.

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