Insights
- India may gain in the US textile market following a 10 per cent tariff hike on Chinese imports, making them costlier.
- With China holding a 25 per cent share in US textile imports, India could fill part of the gap.
- However, challenges like scale limitations and competition remain.
- Experts stress seizing the opportunity while focusing on long-term competitiveness, as tariffs can shift unpredictably.
India is likely to gain some advantage in the US market after 10 per cent tariff hike announcement against China. Trump administration had also announced to hike tariff by 25 per cent on goods imports from Mexico and Canada, but their imposition is now postponed by 30 days after both nations agreed to combat illegal immigration and drug trafficking from their nations.
At present, China holds around 25 per cent market in textiles and apparel imports by the US. The country has supplied 24.23 per cent textile and apparel in terms of value out of the total imports of $99.125 billion by the US during January-November 2024, as per the latest trade data released by the Office of Textiles and Apparel (OTEXA).
Post imposition of 10 per cent tariff, Chinese textiles and apparel will become costlier for the US consumers. It will lead to slow down of imports from China, and the gap may be filled by other suppliers like India and other textile exporting nations.
Bangladesh, the second-largest supplier of garments after China, has not yet fully recovered from the August 2024 political upheaval. In such a scenario, India may be in a strong position to take a large share of the gap created by imposition of tariff on China. However, India would not be able to take full advantage as it has certain limitations, like not being able to produce on large-scale like China, in supplying goods to the world’s largest economy. In addition, it also faces competition from other exporting nations which may also try to take a higher share in the US market. Indian textile veterans are optimistic to get advantage from the latest development.
N Thirukkumaran, General Secretary, Tiruppur Exporters Association (TEA) told Fibre2Fashion, “Tariff is not good for businesses and economies. India might benefit temporarily from the tariff imposed by the US on China. However, there is also a risk that tariff could also be imposed on India. So rather than the temporary benefits, we should aim to look at building competitiveness that would benefit in the long run.”
Sanjay K Jain, Chairman ICC Textiles Committee & Managing Director, TT Ltd said, “The impact of tariff hike will be positive on India. China is a major competitor of India in the market of the US. We should pursue this opportunity strongly to take maximum benefit of the current happening.”
Ashish Gujarati, Past President of South Gujarat Chamber of Commerce and Industry (SGCCI) and President of Surat based Pandesara Weavers Co-operative Society Ltd commented, “The tariff hike on China will give advantage to our industry. If we pursue the opportunity, we can increase shipment of garment and home textiles in the US market.” He said that India exports around 29 per cent textiles to the US. “It is more important market for us. We export not more than 5 per cent textiles in any other market. We can strengthen our position in the US market.”
Rahul Mehta, Chief Mentor, The Clothing Manufacturers Association of India (CMAI) said, “High tariff imposition is a double-edged sword at best of times. Whilst on paper it provides protection to the domestic industry, it also increases the costs of production for the users of such imports. In the case of imports of finished goods into the US, we will also need to take into account the increased prices to US consumers.”
“What will be the social, economic, and political fallout of that? Additionally, what will be the cost of production if such industries are shifted to the US? Both these factors will need to be considered before across the board tariff increases are introduced. Personally, I am of the belief that it will not be in US interest to go in for a massive increase in tariffs,” he stated.
Source: https://www.fibre2fashion.com/