Till three days ago, the Indian textile industry was at an advantageous position with regard to exports to the US, with a slight edge over major competitors like Bangladesh and Vietnam. But today, the industry is at a level playing field with the Asian Tiger — China — in terms of competitiveness.
In the last three months, officials in the textile industry were only talking about Bangladesh and Vietnam. But after the US Supreme Court order, the dialogue is now more on China than the other two countries. “The advantage the Indian textile industry had over China seems to have gone in the past two days,” said Sunil Jhunjhunwala, Co-Founder, Techno Sportwear Pvt Ltd, based in Erode.
“The industry needs to scale. The world is becoming more dependent on China. There is no other country like India, which has the kind of knowledge and the kind of versatility and the kind of depth in the supply chain and skills,” he said.
“We need to create big brands with efficient products and to emerging markets,” he said. “China is also a big market. We should not look at China as a competitor but as a complement,” he added.
At a 15 per cent tariff, India would be on par with China in terms of competitiveness. However, the effect would be limited, as India’s and China’s product portfolios differ, said Aniket Dani, Director, Crisil Intelligence.
The US imports cotton and MMF-based apparel in approximately equal proportions, but India’s exports are mainly cotton-based, while China’s exports are more diversified, with a significant presence in MMF-based apparel. Therefore, the benefit to India from a level playing field with China would be limited to cotton-based apparel.
China is also diversifying its apparel exports to non-US markets, as is evident from the decrease in China’s share in the US apparel imports basket from 19 per cent in the first quarter of 2025 to 12 per cent in the fourth quarter. Consequently, this shift may mitigate China’s competition for Indian exporters in the US market, said Dani.
Sudhir Sekhri, executive committee member of the Apparel Export Promotion Council (AEPC), referring to the recent US tariff revision, feels “India is now on a firm wicket.”
Earlier, shipments faced a 25 per cent duty, and even after some adjustments, exporters were effectively paying around 25 per cent. The new 15 per cent tariff applies across the board and gives Indian suppliers a clear advantage over other Asian exporters, he said. As long as shipments have not been customs cleared in the US, they will be subject to the new rate, he added.
Depending on agreements between importers and exporters, India’s effective duty post-adjustment ranges from 6-17 per cent, and exporters could claim an additional 3-4 per cent benefit under the revised tariff structure, he said.
While the total Ready-made Garments (RMG) exports rose by 2.4 per cent year-on-year to $12 billion during the April-December 2025 period, exports to the US fell by 3 per cent to $3.6 billion from $3.7 billion a year ago. The RMG exports in January 2025 also declined by 3.8 per cent when compared to January 2024, state data from AEPC.
The highest growth in exports during the April-December 2025 period has been to Japan where a 30 per cent growth was seen. Similarly, RMG exports to Saudi Arabia and Italy too grew by 18.5 per cent and 16 per cent respectively during the same period.
Published on February 25, 2026