With US Imposing 50% Tariffs, India Eyes 40 Countries For Textile Market Push

In response to a 50% US tariff, India is launching outreach initiatives in 40 countries to enhance textile exports. With a focus on market diversification, the country aims to increase its market share in a $590 billion import market.

India is set to launch outreach initiatives in 40 countries, including the UK, Japan, and South Korea, to boost textile exports. This move comes in response to a 50% tariff imposed by the US on Indian products. Other target nations include Germany, France, Italy, Spain, the Netherlands, Poland, Canada, Mexico, Russia, Belgium, Turkiye, the UAE, and Australia, PTI reported.

The outreach aims to position India as a dependable supplier of quality textiles. The strategy involves Export Promotion Councils (EPCs) and Indian Missions collaborating in these countries. India already exports to over 220 nations. However, these 40 countries are crucial for diversification.

Focus on Market Diversification

These targeted countries account for over USD 590 billion in textile imports. This presents India with significant opportunities to increase its market share from the current 5-6%. "Recognising this potential," an official stated that the government plans focused outreach in both traditional and emerging markets.

The US's steep tariff affects Indian exports worth over USD 48 billion. Sectors impacted include textiles/clothing, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and machinery. The tariff came into effect on August 27.

Impact of US Tariffs

Mithileshwar Thakur from the Apparel Export Promotion Council highlighted that textiles are among the hardest-hit sectors. With USD 10.3 billion in exports affected by tariffs next only to gems and jewellery at USD 12 billion and machinery at USD 9 billion.

"The apparel industry was prepared for a 25% reciprocal tariff but not an additional 25%," Thakur said. This has pushed Indian apparel out of the US market due to a significant tariff disadvantage compared to competitors like Bangladesh and Vietnam.

Strategies for Growth

The EPCs will spearhead India's participation in global exhibitions and trade fairs under a unified Brand India vision. They will also guide exporters on leveraging free trade agreements (FTAs) and meeting sustainability standards.

Thakur emphasised the need for urgent fiscal support from the government to help sustain operations in the US market until favourable trade terms are restored through bilateral agreements.

Future Prospects

The global textiles import market is projected at USD 800.77 billion by 2024. India's textile sector is expected to reach USD 179 billion by then with a domestic market of USD 142 billion and exports worth USD 37 billion.

EPCs will conduct market mapping and identify high-demand products while linking production clusters like Surat and Tirupur with opportunities in top markets. FTAs with several regions can make Indian exports more competitive.

The industry is also exploring diversification options through trade deals with the UK and EFTA countries to mitigate losses from US tariffs.

With inputs from agencies