CITI suggested that India has a unique opportunity to expand its footprint in the US market, particularly in light of recent US policy shifts that have increased tariffs on key competitors such as China, Mexico, and Canada. To capitalise on this momentum, India should explore a Zero-for-Zero trade agreement with the US for textiles and apparel (T&A), with necessary safeguards for sensitive products.
Indian textile industry sees a significant opportunity in the US as recent tariff hikes impact key competitors like China and Mexico.
CITI has urged a Zero-for-Zero trade agreement with the US to boost exports.
India, the third-largest T&A supplier to the US, could see exports surge to $16 billion in three years.
A duty-free cotton trade deal could benefit both nations.
In a statement issued last week, CITI said, “A zero-duty structure would create a level playing field for Indian exporters against Vietnam, which benefits from duty concessions. With reduced tariffs, India’s T&A exports to the US could surge to $16 billion within the next three years.”
CITI further stated that this would boost India’s share of textile and apparel shipments in total US imports. As India remains dependent on cotton imports from the US, a duty-free access mechanism with quota safeguards could ensure a balanced trade approach. With strategic negotiations and industry-government collaboration, India is well-positioned to seize this transformative opportunity in the US T&A market.
Recently, Sanjay K Jain, chairman of the ICC National Committee and managing director of TT Limited, told Fibre2Fashion, “There is no major tariff disparity between the US and India. India imposes an average import duty of 10.4 per cent on textiles and clothing, compared to the 9 per cent duty imposed by the US on these products.”
The United States is the world’s second-largest market for T&A, accounting for 15 per cent of global T&A exports. For India, the US is the single largest export destination, contributing to 28.5 per cent of India’s total T&A exports between January and November 2024.
India is currently the third-largest supplier of T&A products to the US, after China and Vietnam, holding a 10.8 per cent share of total US T&A imports, valued at $118.4 billion. In contrast, China remains the dominant supplier with a 25.6 per cent share. However, a significant trend is emerging—while US imports from China have declined at a compound annual growth rate (CAGR) of 9.4 per cent over the last five years (2020 to 2024), imports from India have grown at a CAGR of 9.1 per cent during the same period. This highlights a window of opportunity for India to strengthen its position in the US market.
The US-India trade balance in T&A remains strongly in India’s favour. In 2024, US T&A imports from India stood at approximately $10.8 billion, whereas US exports to India were limited to just $0.41 billion. Notably, India primarily imports fibre products from the US, with cotton making up 50.6 per cent of total US T&A exports to India. Conversely, India’s exports to the US are dominated by apparel and home textiles.
In a meeting convened by the Indian government to discuss tariff issues, Atul S Ganatra, president of the Cotton Association of India (CAI), also suggested that to prevent the US from imposing higher tariffs on Indian garment exports, India should allow duty-free cotton imports of up to 1.5–2 million bales (170 kg each) from the US. His suggestion was well received by all attendees, including industry representatives.
Ganatra further stated that if necessary, the Indian government could increase import duties on cotton from other countries to protect domestic farmers. Indian cotton production this season is expected to decline to 30 million bales, as per estimates from the government agency COCPC and CAI, due to a 10 per cent reduction in cotton sowing. Additionally, since China has imposed a 15 per cent duty on US cotton, this is the ideal time for India to allow duty-free cotton imports from the US. A trade arrangement where Indian garments enter the US duty-free while US cotton enters India duty-free would create a win-win situation for both countries.
Gautam Ganeriwal, executive director at Sitaram Spinners Pvt Ltd, also acknowledged the tariff issue as an opportunity. He commented, “The recent US tariff hikes on Chinese imports present a significant growth opportunity for Indian textile manufacturers. With rising sourcing inquiries, we anticipate a 20-30 per cent surge in exports to the US, particularly in cotton textiles and apparel. Sitaram Spinners is scaling production by 20 per cent in the next 9 to 12 months, strengthening supply chains. Our focus on sustainability and compliance makes us a competitive alternative to China.”
“With the right policy support, India can secure a larger share of the global market, and we are well-positioned to lead this transformation,” Ganeriwal added.
Fibre2Fashion News Desk (KUL)
