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US Tariffs Trump Rupee Gains for India Textiles
3 Dec, 2025
Summary
- US tariffs overshadow rupee depreciation for Indian textiles.
- Exports volumes and margins are squeezed by 50% US duties.
- China's improved tariff position benefits US buyers.
- India's textile exports fell 13% year-on-year in October.
India's $37-billion textile and apparel exports industry is struggling to capitalize on the rupee's record low against the US dollar. A significant 50% US tariff burden has effectively negated any potential gains from currency depreciation. Exporters have experienced a reduction in export volumes and severely squeezed profit margins, with many operating at cost or absorbing losses.
The situation is exacerbated by China's improved tariff standing with the US, which offers American buyers more comfort in sourcing from them. The US reduced tariffs on Chinese goods, making Indian imports comparatively more expensive due to a 25% reciprocal tariff and an additional 25% penalty on India.
Industry representatives express hope for a resolution to the trade dispute by December, anticipating the removal of the additional 25% tariff. This resolution is seen as crucial for India to retain its market share in the vital US market, which currently accounts for 28% of its textile exports.
