In a significant development for India's export sector, key industry bodies have warmly welcomed the recent reciprocal tariff reduction by the United States on imports from India. The Apparel Export Promotion Council (AEPC), the Indian Texpreneurs Federation (ITF), and the Open-End Spinning Mills Association (OSMA) have collectively expressed optimism about the positive impact of this bilateral trade agreement.
Industry Leaders Hail Timely Move
Dr A Sakthivel, Chairman of AEPC, emphasized that this reduction from 25% to 18% comes at a crucial time for the Indian apparel industry, which has been grappling with the pressure of high US tariffs previously at 50%. He highlighted that the United States stands as India's single largest apparel export market, attracting fresh investments across the entire value chain. This move is expected to further solidify India's position as a reliable and preferred global sourcing hub for apparel.
Employment and Labor Challenges
Dr Sakthivel pointed out that the apparel sector, being one of the largest employment generators in the country, will benefit immensely from this tariff reduction. He stated, "This move will help safeguard existing jobs and create substantial new employment opportunities, particularly for women, in labour-intensive segments." However, he also addressed a serious issue currently facing the industry: labor availability. To tackle this, he stressed the importance of active collaboration with the Skill Council and other relevant government agencies to develop and maintain a ready pool of trained manpower to meet the anticipated growth.
In view of the sharp increase in labor requirements, Dr Sakthivel urged both state and central governments to consider providing a 50% capital subsidy for the construction of hostels, particularly for women workers. Additionally, he proposed a 5% interest subsidy on the loan amount availed for this purpose, aiming to support the workforce infrastructure needed for expansion.
Export Growth Forecast
Prabhu Dhamodharan, Convenor of the Indian Texpreneurs Federation (ITF), shared an optimistic outlook for the sector. He noted that with key Free Trade Agreements (FTAs) nearing closure and rising US sourcing interest from India, the export outlook is set to improve steadily. From the fiscal year 2026–27 onwards, the sector can anticipate month-on-month double-digit growth in apparel and home textile exports. This growth is projected to lift the monthly apparel export run rate to $1.5 to 1.6 billion, up from the current $1.27 billion.
Dhamodharan also commended Indian exporters for their resilience during challenging times, stating, "We also commend Indian exporters for their resilience by adopting survival-export strategies, offering discounted prices, and protecting India's export market share during a challenging phase."
Regional and Sectoral Benefits
G Arulmozhi, President of the Open-End Spinning Mills Association (OSMA), highlighted the broader implications of this tariff reduction. He explained that since the import duty imposed on India is now lower than that levied on neighboring countries, exports of Indian textile products to the US are expected to increase manifold in the coming days. This development will particularly benefit textile exporters in key regions such as Tirupur, Karur, and Erode, as well as the OE mills and spinning mills that supply yarn to them, enabling substantial growth across the entire textile sector.
Arulmozhi further added that the reduction in U.S. import duties, coupled with forthcoming duty-free trade agreements with the United Kingdom and European countries, will drive remarkable growth in the Indian textile industry. As a result, employment opportunities in the textile sector are expected to multiply significantly, contributing to economic development and job creation on a large scale.
Overall, this tariff reduction marks a pivotal moment for India's apparel and textile industries, promising enhanced export performance, increased investments, and a boost to employment, especially for women in labor-intensive roles.
