New Delhi (Economy India): India’s landmark trade agreement with the United States is poised to unlock access to America’s massive $118 billion global import market for textiles, apparel and made-ups, offering a significant growth opportunity for India’s textile industry, the government said on Saturday.
The Ministry of Textiles described the development as a major strategic boost for Indian exporters, particularly as the US remains the largest export destination for India’s textile and apparel products.
Strong Tariff Advantage for Indian Exporters
According to the government, the agreement introduces an 18 per cent reciprocal tariff on Indian textile products, including garments and made-ups. This move removes the long-standing tariff disadvantage faced by Indian exporters in the US market.
More importantly, the new tariff structure places India in a more competitive position than several key global rivals, including:
- Bangladesh: 20%
- China: 30%
- Pakistan: 19%
- Vietnam: 20%
“This tariff differential will significantly enhance the price competitiveness of Indian textiles and apparel in the US market,” the ministry said, adding that Indian exporters could gain market share from competing countries.
Boost to Exports, Employment and MSMEs
The textile sector is one of India’s most labour-intensive industries, employing millions of workers, especially women. Officials believe the expanded access to the US market will:
- Increase textile and apparel exports
- Support small and medium enterprises (MSMEs)
- Generate large-scale employment across the value chain
- Encourage investment in manufacturing capacity
The trade pact is expected to strengthen the Make in India initiative by promoting value-added manufacturing rather than raw material exports.
Strategic Opportunity Amid Global Supply Chain Shift
The agreement comes at a time when global brands and retailers are actively diversifying supply chains to reduce dependence on a single country. India’s improved tariff position could help it emerge as a preferred sourcing destination for US buyers seeking reliability, scale and compliance.
Industry experts say the pact may lead to:
- Higher long-term sourcing contracts
- Increased foreign investment in textile parks
- Technology upgrades and modernisation of factories
This aligns with government initiatives such as the PLI scheme for textiles and the development of PM MITRA Mega Textile Parks.
Strengthening India–US Trade Ties
The textile market opening is part of the broader India–US trade partnership, which aims to deepen bilateral economic engagement, enhance supply chain resilience and support sustainable growth.
Officials said improved market access to the US could help India move up the global textile value chain, from basic garments to high-value fashion, technical textiles and branded products.
Long-Term Impact on India’s Textile Industry
With the US accounting for a significant share of global textile imports, the agreement is expected to:
- Increase India’s share in the US textile market
- Improve export earnings
- Support rural and semi-urban employment
- Strengthen India’s position as a global textile hub
“The agreement represents a structural opportunity for the Indian textile sector to scale up exports and compete more effectively on the global stage,” the ministry said.
The India–US trade pact marks a transformational moment for India’s textile industry. By unlocking access to a $118 billion market and providing a tariff edge over major competitors, the agreement could drive export growth, job creation and industrial expansion in one of India’s most critical manufacturing sectors.
If implemented effectively and supported by industry readiness, the pact could significantly contribute to India’s goal of becoming a global manufacturing and export powerhouse.
(Economy India)
