India braces for impact of 50% tariff on exports to US

On August 27, a 50% tariff on Indian goods entering the U.S. is set to come into effect. A prospect that is especially concerning for India’s textile-apparel industry, a sector in which the country is the second largest supplier to the U.S. after China.

Last year, India exported $16.3 billion worth of textile and apparel products to the USA. And the recent tensions relating to the unsuccessful trade negotiations between the two nations prompted U.S. importers to increase their orders placed to Indian manufacturers. In H1 2025, U.S. orders to India grew by 18.6%, while orders placed to China fell by 16.2%.

The U.S. clearly plays a key role in India’s textile and apparel export strategy, being the market that absorbs 25% of India’s exports. As did other Asian countries targeted by Donald Trump’s new tariffs, India has expressed through its government the possibility of redirecting its exports to European clients. Last year, India exported €6.7 billion worth of textile and apparel products to the EU, but it would now have to compete with other Asian supplier countries on the European market.

The Indian government is also concerned about the impact U.S. tariffs would have on employment. The textile sector alone is said to generate more than 45 million direct jobs in India, plus an additional 100 million or so indirect jobs, making it the second-largest employer in the country. India is also one of the world’s leading cotton producers, and has more than 3,400 textile factories.