US Tariff Hike Raises Concerns for Textile Exporters

Global Trade Policy Update

February 26, 2026

Key Developments

The US trade policy has entered a period of extreme volatility following the scrapping of the International Emergency Economic Powers Act (IEEPA). As a result, a 15 percent flat global tariff is expected to take effect, down from the current rate of approximately 18 percent.

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Impact on Indian Apparel Exporters

Indian apparel exporters are adopting a "wait-and-watch" stance due to the fluid and erratic nature of the situation. Industry players warn that long-term planning is challenging in uncertain conditions. The revised tariff rates may neutralize the slight edge Indian exporters had over rival countries, including Bangladesh and Vietnam.

Trade Statistics

• The US accounts for approximately 28% of India's textile exports, with shipments worth $10.05 billion in FY24.
• Apparel forms the biggest share of exports, followed by home textiles and made-ups.
• India's total textile and apparel exports stood close to $38 billion in FY25.

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Challenges Ahead

Indian exporters face the challenge of repricing contracts and maintaining a competitive edge against rivals like China and Bangladesh in a market that remains far from bullish. The revised tariff rates may narrow the relative advantage Indian exporters had over China and Bangladesh.

Market Reaction

Indian textile stocks rallied on February 23 after the US Supreme Court struck down sweeping import levies imposed by Donald Trump. Key stocks that rose significantly include:

• Kitex Garments Ltd: 5.74 percent to Rs 196.84
• Trident Ltd: 4.5 percent to Rs 26.76
• Welspun Living: 2.68 percent to Rs 140.44

US Court Ruling

The US court's ruling on February 23 invalidated tariffs that had been introduced under a national emergency law, easing concerns around trade disruptions and lifting sentiment across export-oriented shares.