The Indian textiles and garment industry has urged the government to provide urgent relief as the additional 25 per cent punitive tariff imposed by the US will take effect from August 27, 2025. This will push the total duties on Indian apparel exports to above 50 per cent. Industry representatives warned the move poses an existential challenge, threatening millions of jobs and thousands of factories.

The Apparel Export Promotion Council (AEPC) said the industry had reconciled to a 25 per cent reciprocal tariff but the further burden would make Indian exports uncompetitive. “The additional 25 per cent will close the US market for Indian apparel. Exporters will now face a tariff differential of 30–31 per cent against major competing nations,” AEPC Secretary General Mithileshwar Thakur told Fibre2Fashion. He urged immediate fiscal support until a bilateral trade agreement can be reached.

India’s apparel industry warns of an existential crisis as US tariffs on exports will soar to above 50 per cent from August 27, 2025.
Exporters face a tariff gap of over 30 per cent against competitors, risking three million jobs and 20,000 factories.
Industry leaders urge urgent fiscal support and stronger diplomatic engagement until a bilateral trade pact is secured.

Jasveen Kaur, Senior Director of Merchandising at New Times Group, described the tariff shock as “seismic,” saying nearly 25 per cent of Tiruppur’s US-bound knitwear orders have already been paused or cancelled. “This is not about two per cent of GDP—it is about millions of jobs and the survival of entire communities,” she said, adding that exporters are slashing prices to keep shipments moving as US buyers renegotiate or withdraw.

Industry estimates suggest around three million jobs and 20,000 factories are at risk. While some exporters are exploring joint ventures in Bangladesh, Sri Lanka, and Southeast Asia, Kaur noted that diversifying markets and securing new buyers could take more than a year. “We need decisive government action and stronger diplomatic engagement with the US,” she appealed.

Sanjay K Jain, Chairman of the ICC National Textiles Committee and MD of TT Ltd, echoed these concerns. “The industry is at a standstill, and 50 per cent of orders (for export to the US) will likely be cancelled. The rest can only be retained if exporters absorb losses. The impact of such super-high tariffs will be terrible and felt across the entire value chain,” he warned.

While the government’s recent move to waive the 11 per cent cotton import duty was welcomed, industry players said it offers little relief against the tariff shock. Exporters are focusing on cost optimisation, targeting a 15–20 per cent reset, but say sustained government support is vital to prevent large-scale disruption in India’s apparel sector.

Fibre2Fashion News Desk (KUL)