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In a stunning escalation of trade tensions, the United States has imposed a steep 50% tariff on key Indian exports, pushing total duties on some products well above 60%. Among the worst-hit sectors are textiles, apparel (knitted and woven), and carpets—pillars of India’s export economy and rural employment. These sectors are now facing what could be described as an existential crisis, with the U.S. market—a long-standing buyer—suddenly turning expensive and unwelcoming.

The U.S. Market: A Lifeline for Indian Exporters

India’s dependence on the U.S. for its textile-related exports is staggering:

Textiles: 48.4% of India’s textile exports go to the U.S.

Knitted Apparel: 34.5% of exports land in the U.S.

Woven Apparel: 32.2% are U.S.-bound.

Carpets: A massive 58.6% of India’s handmade carpets go to American buyers.


These numbers are not just trade statistics—they reflect the deeply embedded role the U.S. plays in sustaining entire export ecosystems across India, from Tirupur and Ludhiana in apparel to Bhadohi and Jaipur in handmade carpets.

The Tariff Breakdown

Based on recent data compiled by the Global Trade Research Initiative and visualized in a Bloomberg infographic, here are the total tariff rates that now apply:

Category Total Tariff (%)

Textiles 59%
Knitted Apparel 63.9%
Woven Apparel 60.3%
Carpets 52.9%


These are not marginal increases—they are price killers. A 60% tariff effectively makes Indian goods unviable in one of the world’s most lucrative markets.

Fallout: Competitive Disadvantage in a Cutthroat Market

India now faces serious competition from countries that enjoy preferential access to the U.S. market:

Mexico benefits from USMCA, a free trade agreement that gives its exports near-zero tariffs.

Vietnam has strong trade ties with U.S. allies under CPTPP.

Bangladesh, classified as a Least Developed Country (LDC), gets duty-free access on several apparel lines.


This means U.S. buyers—especially those in the fast fashion and home décor segments—will look elsewhere, even if it means sacrificing a degree of craftsmanship. In the world of global sourcing, cost often trumps quality, especially in high-volume segments.

Sectoral Impact: A Ground Reality Check

🧶 Textiles and Apparel

India exported about $8 billion worth of textiles and apparel (combined) to the U.S. in FY 2024–25. Now, with tariffs above 60%, these products risk being priced out. Tirupur, India’s knitted garment hub, may see a decline in new orders, leading to factory closures and worker layoffs. MSMEs, already grappling with rising input costs, are ill-equipped to absorb this shock.

🧵 Handmade Carpets

India’s dominance in the hand-knotted and hand-tufted carpet sector is under immediate threat. Artisanal belts across Uttar Pradesh, Rajasthan, and Kashmir may see reduced demand. With over 50% of exports going to the U.S., even a 10% drop in demand could wipe out the livelihoods of thousands of artisans.

Unlike apparel, carpets are premium products, and the steep 52.9% tariff is a massive hurdle in an already niche market. American interior designers and retailers may now look to Turkey, Egypt, or Pakistan, which offer cheaper alternatives.

National Economic Implications

The immediate impact will be felt on:

Export earnings: A potential annual loss of $8–10 billion if tariffs continue.

Employment: Textiles and carpets employ millions of rural workers, especially women.

Supply chains: Reduced orders could strain India’s already fragile MSME export ecosystem.


Over time, this could spill into wider macroeconomic stress, especially in states like Tamil Nadu, Punjab, Uttar Pradesh, and Rajasthan, where these industries are concentrated.

Strategic Options for India

The road ahead is tough, but not without alternatives. Here’s how India can respond:

1. Trade Diplomacy and FTA Push

India must accelerate bilateral trade negotiations with the U.S., potentially seeking sector-specific relief. If not a full Free Trade Agreement (FTA), then a limited textile deal could help.

2. Market Diversification

Exporters should target Europe, Japan, Australia, and the Middle East, where Indian goods are still competitive. African markets also offer untapped potential.

3. Government Incentives

The government must expand and reinforce RoDTEP, RoSCTL, and PLI schemes to cushion the blow. Special emergency relief packages for MSMEs in apparel and carpet sectors should be considered.

4. Product and Brand Upgradation

India must move away from price-based competition to value-based branding. Eco-friendly apparel, ethical sourcing labels, and premium craftsmanship can create a unique identity and demand resilience even in high-tariff markets.

The U.S. tariff hike is not just a policy decision—it is a wake-up call for India’s export ecosystem. Without swift corrective action, India risks losing its hard-earned position in global textile and carpet markets. At stake are not just billions in trade, but also millions of jobs, cultural heritage, and economic stability in key regions of the country.
India must act now—or risk being priced out of one of its most vital export markets.#USATariffs
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