India–US trade agreement set to transform textile sector, open new export pathways

The landmark trade agreement between India and the United States is being widely welcomed as a major turning point for India’s textile and apparel industry, with stakeholders viewing it as a powerful catalyst for strengthening bilateral trade and accelerating export growth. The Ministry of Textiles has described the agreement as a significant step forward in deepening textile trade relations between the two countries and unlocking fresh opportunities for Indian manufacturers and exporters.

One of the most notable outcomes of the agreement is expanded access to the United States’ massive global import market for textiles, apparel, and made-ups, estimated at nearly $118 billion. The US is already India’s largest export destination in the textile sector, with exports valued at approximately $10.5 billion. Of this, apparel accounts for nearly 70 percent, while made-ups contribute around 15 percent, underlining the importance of the US market for India’s export ecosystem.

Industry experts believe the agreement could play a decisive role in helping India achieve its ambitious target of $100 billion in textile exports by 2030. The United States alone is expected to contribute more than one-fifth of this target, providing sustained momentum to the sector over the coming years.

A key advantage of the agreement lies in the introduction of an 18 percent reciprocal tariff on textile products, including apparel and made-ups. This development eliminates the cost disadvantage previously faced by Indian exporters and places them in a more competitive position compared to major global rivals. Competing textile-exporting nations such as Bangladesh, China, Pakistan, and Vietnam face higher reciprocal tariffs of 20 percent, 30 percent, 19 percent, and 20 percent respectively. This shift is expected to significantly alter sourcing strategies, prompting global buyers to reassess supply chains in favour of India.

Beyond export competitiveness, the agreement also offers Indian manufacturers greater flexibility to source intermediate inputs for the textile sector from the United States. This is expected to improve cost efficiency, support the production of higher-value textiles, and encourage diversification in both manufacturing and export portfolios. Enhanced access to quality intermediates is likely to strengthen India’s position in the value-added and technical textiles segments.

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The trade deal is also expected to generate broader economic benefits, including increased employment opportunities and higher levels of investment. The improved trade environment may encourage greater participation by US companies in India’s textile value chain, supporting capacity expansion, technology adoption, and long-term industry growth.

Overall, the India–US trade agreement is being seen as a potential economic game changer for the textile industry, positioning India to strengthen its global market share, attract new investments, and move closer to its long-term export and employment goals.