Mutual Tariff Reductions with the U.S.: A Realistic Possibility
What’s Changing: If the U.S. reciprocates India’s zero or reduced tariffs, as lately ‘shouted from rooftops’ by the Trump administration, offering similar access for Indian textile exports, it marks a major shift in bilateral trade dynamics.
Current U.S. import duties on Indian apparel (up to 32%) are a competitive disadvantage.
Reduced or eliminated tariffs would significantly boost the price competitiveness of Indian garments, home textiles, and MMF-based products.
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Implications:
Revival and expansion of Indian textile exports to the U.S.
Industry will be hugely motivated to set up big manufacturing infrastructure in Bangladesh and Vietnam, so necessary to cater to large volumes of the USA market.
Enhanced opportunity for exporters to capture new buyers.
Possibility to regain the share lost to Bangladesh, Vietnam, and China over the past decade.
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Strengthening India’s Role in Realigned Global Supply Chains
With U.S. buyers increasingly seeking to diversify away from China, India stands to gain as a “China +1” alternative.
Tariff concessions will complement
PLI scheme for textiles
PM MITRA textile parks
Duty-free access to raw materials under FTA with ASEAN and others
Result: India can offer competitive landed costs with an increasingly modern and integrated supply base.
Exporters Must Gear Up for Opportunity
To fully leverage the tariff advantage, Indian exporters must:
Invest in design, innovation, and fast fashion capabilities
Ensure compliance with U.S. safety, labor, and sustainability norms
Modernize operations with digitization and supply chain visibility. Invest in big factories and infrastructure.
Speed to market, quality assurance, and reliable delivery will be as important as price.
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4. Potential Risks and Mitigations
Increased imports from the U.S. (as part of the quid pro quo) may create competition for Indian brands in the domestic premium space.
India must be cautious to balance domestic industry protection with export ambition.
The risk of non-tariff barriers or administrative bottlenecks must be proactively addressed by Indian trade bodies.
Conclusion: A Turning Point for Indian Textiles
Nuanced view: The expected U.S.-India reciprocal tariff framework could reshape India’s textile export landscape. It offers not only a pricing advantage but also the strategic opportunity to rebuild U.S. partnerships, attract new buyers, and secure long-term growth.
For Indian textile firms, the moment is ripe for global reassertion—but only if they act with agility, vision, and sustained investment in capability.
CREDITS: Sanjiv Mehan is Professor in Practice , Department of Management Studies, Panipat Institute of Engineering & Technology. He is an MBA from the Faculty of Management Studies (FMS), University of Delhi, and a textile engineering degree from TIT Bhiwani.