Fashion
Tariff pressure casts shadow on Gujarat’s textile landscape
Industry insiders are ringing alarm bells over the unfolding situation “There’s no way to absorb a 50 per cent tariff hike; we don’t have the margins,” claimed one industry player in conversation with Fibre2Fashion.
Many within the industry are worried that the abrupt increase in US tariffs could derail their businesses completely.
The duties on Indian textiles and apparel exports to US, across categories, will reach alarming levels.
Carpets will reportedly face a 52.9 per cent tariff, knitted garments 63.9 per cent, woven garments 60.3 per cent, and textiles & made ups 59 per cent.
In FY25, Gujarat’s export landscape was led by petroleum products at $43.9 billion, followed by engineering goods worth $16.6 billion, gems and jewellery at $8.3 billion, and textiles at $5.6 billion, as per some estimates. While textiles may not be the state’s top export, it is especially important due to the large-scale employment and deeply integrated supply chains that it supports. Now, with tariffs set to double—from 25 per cent to 50 per cent—industry players are bracing for the worst even as some expressed apprehensions that the abrupt increase in tariffs could derail their businesses altogether.
Reflecting the wider sentiment, an industry player explained that US shipments across the board have been put on hold while many well-established direct exporters are also struggling to keep operations running smoothly as shockwaves from the tariff hike spread through every link in the textile value chain. Mills, job work units, and raw material suppliers are already beginning to feel the heat, and if large exporters start losing orders, the consequences could cascade down to the smallest players in the ecosystem, creating a widespread disruption.
Order cancellations for US shipments are already piling up, media reports claim, and industry players confirm the slowdown is real—with no clarity on what lies ahead.
What compounds the issue further is the fact that the 50 per cent tariff is not a standalone levy—it is in addition to the standard import duty already in place in the US. Some estimates indicate that total duties on Indian textiles and apparel exports to the US will now reach alarming levels across various categories: carpets will face a 52.9 per cent tariff, knitted garments 63.9 per cent, woven garments 60.3 per cent, and textiles and made ups 59 per cent.
These figures illustrate just how uncompetitive Indian products will become under the new regime, effectively pricing them out of the US market.
In response to the emerging crisis, the Ministry of Commerce and Industry has reportedly begun reaching out to export-heavy states like Gujarat, Maharashtra, and Tamil Nadu, urging them to extend support to labour-intensive industries such as textiles. Simultaneously, the Central Government is reportedly working on a three-pronged approach to help exporters navigate the fallout from the US tariffs. One key component of this strategy involves the launch of a sector-specific support scheme under the proposed ₹2,250 crore Export Promotion Mission. The objective is to offer immediate relief to impacted sectors, while also identifying alternative international markets for redirected exports and encouraging domestic consumption of surplus products.
The Union Ministry of Textiles, for its part, has reopened the Production-Linked Incentive (PLI) scheme for the textile sector, inviting fresh applications from eligible entities. This decision came in response to growing appeals from the industry, which has been seeking urgent support to weather what many view as an existential threat.
The Government has also recently removed the 11 per cent import duty on cotton till September 30 this year, in a move to help the domestic textiles industry to deal with the US tariff issue.The decision, notified by the Central Board of Indirect Taxes and Customs (CBIC), is expected to lower input costs across the textile value chain encompassing yarn, fabric, garments, and made ups and provide much needed relief to manufacturers.
However, there is still scepticism within the industry if such interventions could help insulate it from the implications of high tariffs and long-term damage.
Fibre2Fashion News Desk (DR)
According to the Drewry WCI index, the spot rates from Shanghai to New York and Los Angeles decreased by 3 per cent to $3,552 and $2,810, respectively, per 40-foot container. As per Drewry’s Container Capacity Insight, 9 blank sailings have been announced on the Transpacific trade route for next week to maintain capacity. A few carriers have announced a Peak Season Surcharge (PSS) of around $2,000 per 40ft container, effective May 1. Drewry expects freight rates to remain relatively stable in the coming weeks before the implementation of the announced PSS.
Drewry WCI snapped a six-week rally, falling 2.72 per cent to $2,246 per FEU amid easing freight rates.
Declines on Asia–Europe and Transpacific routes drove the drop, though carriers plan PSS hikes from May.
Despite Middle East tensions, rates are expected to remain relatively stable, with capacity shifts and blank sailings influencing movements.
Spot rates on the Shanghai–Rotterdam trade route decreased 3 per cent to $2,229 per 40ft container, while rates on Shanghai–Genoa fell 2 per cent to $3,343 per 40ft container. Carriers are increasing effective capacity on this trade route, with only one blank sailing announced so far. Meanwhile, ZIM has announced a new bunker factor (NBF) of $850 per container, effective May 1, but for now Drewry expects freight rates to remain stable in the coming week.
Rates from New York to Rotterdam decreased 4 per cent to $1,022 per FEU, while Rotterdam to New York increased 3 per cent to $2,030 per FEU. Rotterdam-Shanghai rose 1 per cent to $599 per FEU, and Los Angeles–Shanghai steadied at $762 per 40-foot container.
The US-led naval blockade around the Strait of Hormuz has halted or restricted ships linked to Iran, with multiple vessels turned back. The disruption has strongly impacted global oil supply chains and pushed oil prices even higher. If ongoing negotiations fail, shippers should prepare for reduced schedule reliability, potential port omissions, longer lead times and upwards pressure on freight rates.
Fibre2Fashion News Desk (KUL)
The country has ensured import of refined fuel from alternative sources despite the global situation, and there will be no adverse impact on oil supply due to ERL’s low feed operations, Energy Division joint secretary Monir Hossain Chowdhury was cited as saying by domestic media outlets.
Bangladesh’s Energy Division recently said the capacity of Eastern Refinery Limited (ERL) would affect little the fuel supply system as the unit contributes only a fifth of the country’s petroleum supply system while the rest is imported in refined form.
It has ensured import of refined fuel from alternative sources, and there will be no adverse impact on oil supply due to ERL’s low feed operations.
The facility is now operating two of its four units to refine oils with ‘dead stocks’ and is expected to make two other units operational again, he said. The process to import crude is under way.
Chowdhury said production slowdowns at two ERL units due to crude oil shortages would not disrupt the nation’s fuel supply as over 255,000 metric tonnes of refined fuel is in stock now.
The Strait of Hormuz has been almost closed since February 28 preventing scheduled arrival of 2,00,000 metric tonnes of crude oil to Bangladesh during that period, he noted.
A ship carrying 100,000 tonnes of crude was supposed to arrive from Saudi Arabia in March, but is currently stuck at Rastanura Port as it could not cross the Hormuz Strait, he informed reporters at a press conference. Another ship from the United Arab Emirates (UAE) also met the same fate.
A third ship carrying 100,000 tonnes of Arabian light crude is scheduled to depart from the UAE on April 20 and expected to reach Chattogram via an alternative route on May 2 or 3, he said.
The government has also requested Saudi Arabia to provide another 100,000 tonnes of crude oil in May, he added.
A work order has been issued with the approval of the cabinet to import 100,000 tonnes of crude oil through direct purchase to meet urgent needs.
Fibre2Fashion News Desk (DS)
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