Indian textile exporters turn to Europe, offer discounts to offset US tariffs

Indian textile exporters are seeking new buyers in Europe and offering discounts to existing US customers to cushion the blow from steep US tariffs of as much as 50%, industry executives said. President Donald Trump doubled tariffs in August on Indian imports, placing them among the highest for any trading partner, and affecting goods and produce ranging from garments and jewellery to shrimp.

A Mumbai-based garment exporter, who sought anonymity ahead of signing export contracts, said his company was prioritising diversification into European Union markets and that an early trade deal with the bloc would help boost shipments from India.
Trade talks between India and the EU have entered a decisive phase, as their teams work intensively to meet a year-end target for signing a free trade pact.

The EU is India’s largest trading partner for goods, with two-way trade of $137.5 billion in the fiscal year to March 2024, for an increase of nearly 90% over the past decade. Indian exporters are stepping up efforts to meet the EU’s tougher standards on chemicals, product labelling, and ethical sourcing, textile exporters said.

Exporters are upgrading production facilities to meet these standards, said Rahul Mehta, whose website describes him as the chief mentor of the Clothing Manufacturers Association of India. Exporters are also keen to reduce their dependence on the US, Mehta added.

The US was India’s largest market for textiles and apparel in the fiscal year to March 2025, taking nearly 29% of total exports of roughly $38 billion. Some exporters have started offering discounts to retain US customers, said Vijay Kumar Agarwal, chairman of Mumbai-based Creative Group, whose US exports make up 89% of its total shipments.

If US tariffs continue to bite, the company could lose 6,000 to 7,000 of its 15,000 workers, and after six months may consider moving production to Oman or neighbouring Bangladesh, Agarwal said.