The reduction in US tariffs on Indian goods to around 18% is being viewed as a positive development for textile exporters, particularly in labour-intensive segments such as garments and made-ups, with industry participants expecting an improvement in price competitiveness and a gradual revival in order flows. This is being seen as a positive development, especially for textile hubs in India.
The development is considered significant for Madhya Pradesh, where the United States is the largest export destination. The US accounts for nearly 20% of the state’s outbound shipments, valued at approximately Rs. 66,218 crore (US $ 7.30 billion) in FY ’25. Exports from Madhya Pradesh to the US are estimated at Rs. 13,000–14,000 crore (US $ 1.43 billion-US $ 1.54 billion), with the Indore–Dhar–Dewas belt contributing nearly 53% of the total.
Vivek Vishnoi, director at Kashida Apparels Pvt Ltd, said the tariff reduction improves price competitiveness in the US market and could support a revival in orders, improved capacity utilisation and margin expansion. He added that diversified global sourcing strengthens India’s overall position, although sustained benefits would depend on execution and cost discipline. Kashida Apparels operates a major manufacturing facility for the Biba ethnic wear brand in Dhamnod, Madhya Pradesh, and is among the key units linked to export activity in the region.
Textile manufacturers and garment exporters indicated that several US buyers who had adopted a wait-and-watch approach during the period of elevated tariffs are now expected to resume sourcing from India. R S Goswami, president of the Federation of Madhya Pradesh Chambers of Commerce and Industry, said earlier US tariffs of around 50% had almost halted exports, restricting shipments largely to essential items. He noted that the revised 18% tariff level is expected to revive buyer interest and restore order flows, benefiting not only textiles but also allied sectors such as leather, chemicals, engineering goods, handloom and handicrafts.
Exporters in Tamil Nadu’s Tirupur textile hub have also welcomed the India–US framework trade agreement, stating that it enhances the competitiveness of Indian manufacturers against countries such as China and Bangladesh. Industry representatives expressed optimism that orders worth around Rs. 4,000 crore (US $ 441 million), which were previously held back, could now be released following the tariff reduction.
K M Subramanian, president of the Tirupur Exporters’ Association, described the joint statement issued by India and the United States as significant, noting that it offers strong growth prospects for the region. He said exports from Tirupur, currently valued at about Rs. 15,000 crore (US $ 1.65 billion), could potentially double over the next five years. He also indicated that the agreement could generate substantial employment, adding that the industry currently employs around one million people and could add another 500,000 workers over the next three to five years if the momentum continues. According to him, the short-term impact of the agreement is expected to become visible within the next three months, with garment shipments from Tamil Nadu set to rise thereafter.
Tirupur has long been recognised as one of India’s leading hubs for textile manufacturing and exports, supplying finished apparel to major markets in Europe and the United States. The cluster accounts for more than 55% of India’s total cotton knitwear exports.
The trade agreement is also expected to provide a significant boost to Gujarat’s export economy. Officials said medium-term export growth in certain sectors could rise by 100–150%, with textiles likely to benefit the most. According to official estimates, lower tariffs will make Gujarat’s garments and home textiles substantially more competitive in international markets, driving higher production levels in key textile clusters and attracting new orders from the United States.
Officials noted that improved margins and fresh demand could help offset losses incurred during the period of high tariffs, while increased export activity is likely to generate employment across MSMEs, manufacturing units, logistics and ancillary services, providing a broader boost to state economies.
