US retaliatory tariffs put India in 'favourable position' for textile exports Experts

     New Delhi, Apr 3 (PTI) The US retaliatory tariffs have put India in a "favourable position" in terms of textile exports as the country will have relative cost advantage vis-a-vis other garment-exporting countries like China, Vietnam, and Bangladesh, experts said on Thursday.
     The US has announced 27 per cent reciprocal tariffs on India, saying New Delhi imposes high import duties on American goods, as the Donald Trump administration aims to reduce the US' trade deficit and boost manufacturing.
     "The reciprocal duty announced by the US clearly indicates that India is in a highly favourable position compared to other garment-exporting countries like China, Vietnam, and Bangladesh. We have already started receiving inquiries from US customers regarding free capacity availability," Raymond Group CFO Amit Agarwal told PTI.
     Echoing similar sentiments, EY India Partner and Retail Tax Leader Paresh Parekh said presently it appears "advantage India" for the Indian textile sector.
     "India competes globally for textile exports with countries like Bangladesh, Vietnam, Cambodia, Sri Lanka, China, Pakistan, etc.
     "Interestingly, as compared to around 27 per cent tariff for Indian imports, these countries have been hit harder by USA tariffs: Bangladesh at 37 per cent, Vietnam at 46 per cent, Cambodia at 49 per cent, Pakistan at 29 per cent, China at 54 per cent, Sri Lanka at 44 per cent, etc," he said.
     The US imports textiles worth over USD 36 billion from India.
     "This situation poses an opportunity for the Indian textile sector to grab and increase its market share in the US. However, there is a risk as well -- if there is a slowdown in consumption in the US due to higher prices, the overall US market itself may shrink.
     "The Indian textile sector also hopes to secure further strategic advantage by inclusion of textile in potential 'zero for zero" India-USA trade deal if it happens," said Parekh.
     However, players as Apollo Fashion International has cautioned that Trump tariff will be a significant challenge, especially for businesses operating on thin margins.
     "It will impact pricing and demand in the short-term, but the fundamentals of the industry remain strong. India has built a robust supply chain, skilled workforce, and growing capabilities in quality manufacturing," said Apollo Fashion International President Shiraz Askari.
     Agarwal also said other key markets may continue to purchase goods from duty-affected countries, which could result in India facing competition in those markets.
     However, Askari also agreed that compared to countries like Vietnam and Bangladesh, which now face even higher tariffs, India still has a relative cost advantage.
     "The focus now should be on improving efficiency, strengthening compliance, and diversifying markets to reduce over-dependence on any one geography. The industry has handled disruptions before, and this is another moment that calls for smart, decisive action,” he said.
     Deloitte India's Partner & Consumer Industry Leader Anand Ramanathan also said that lower tariffs in comparison to China, Vietnam and Bangladesh will improve the competitiveness of Indian textile exports to the US.
     "However, the key will be the ability of Indian exporters to step up and invest in capacity expansion, technology modernization and design capabilities to benefit from this emerging opportunity," he said.
     Moreover, US tariffs will also help some Indian textile companies which have operations in some other country, where the reciprocal tariff is lower.
     Raymond has invested substantially in Ethiopia, on which the US has imposed only 10 per cent reciprocal duty.
     "Our garment manufacturing facility in Ethiopia, where the reciprocal duty is 10 per cent, presents an attractive destination to capture US garment sourcing," said Agarwal.
     Raymond has a capacity to produce 7.5 million pieces of jackets, trousers and shirts in India and 3.2 million in Ethiopia.

(This story has not been edited by THE WEEK and is auto-generated from PTI)