US Tariffs Crush Indian Textile Exports: Sector Faces 50% Decline, Seeks Government Intervention in Trade Dispute

Listeners, welcome to India Tariff News and Tracker. As of October 2025, India’s trade relations with the United States remain at the center of global headlines, with tariffs and negotiations dominating the discussion. The most impactful development shaping the mood today is the United States’ imposition of exceptionally high tariffs on Indian goods, particularly textiles, with rates currently at 50 percent for many products—double or more what competitors such as Bangladesh and Vietnam face, as reported by the Confederation of Indian Textile Industry’s latest survey. Industry sources note that this tariff burden has delivered a major blow to Indian textile and apparel exporters, whose US-bound shipments account for 28 percent of India’s total sector exports. CITI’s findings show nearly one-third of surveyed firms reported turnover declines of over 50 percent following the US tariff hikes. There have been widespread requests from US buyers for price discounts, cancellations, and postponed orders, all of which have forced Indian firms to cut prices by around 25 percent just to retain their US business. In fact, 85 percent have seen inventory pileups, and most are experiencing intense liquidity pressures, with over 80 percent reporting longer credit cycles—three to six months more in many cases—and sharply increased working capital needs. With pressure mounting, more than half of India’s textile exporters now seek government intervention, calling for moratoriums on loan repayments and easier access to collateral-free credit, along with clear policy recommendations to fast-track free trade agreements and provide targeted relief to this embattled sector. Industry leaders stress that restoring competitiveness against rivals is imperative, especially as India’s textile exporters now face the highest rate among major exporting nations. Turning to the broader diplomatic atmosphere, both governments have resumed direct negotiations, and, according to The Economic Times, there is renewed optimism that the first phase of a new India-US trade agreement could be finalized by November 2025. Piyush Goyal, Commerce and Industry Minister, has stated both sides are satisfied with the progress and are working intensively to bring the talks to conclusion. Nevertheless, serious roadblocks remain. The biggest is the additional 25 percent US tariff connected to India’s purchase of Russian crude oil—compounding the strain already imposed by steep reciprocal tariffs. Many analysts warn these oil-linked tariffs must be rolled back for any breakthrough to happen, and finance minister Nirmala Sitharaman confirms that while relations are under pressure, diplomatic engagement is ongoing. Looking at the Trump angle, Indian Express points out that despite displays of friendship between Trump and Indian leaders, the US continues to maintain these high tariffs—50 percent on goods, plus the added 25 percent on oil. Trump has moderated aggressive rhetoric towards China, but th This content was created in partnership and with the help of Artificial Intelligence AI.