The India-US trade agreement is set to play a crucial role in India’s goal of achieving $100 billion in textiles exports by 2030, as per the government’s statement. The Ministry of Textiles anticipates that the deal will offer the necessary impetus, with the US contributing over one-fifth towards this target.
This significant agreement between India and the US has been warmly received by the Ministry, seen as a key driver in enhancing textile trade relations between the two countries. The textile industry views this development optimistically, considering it a substantial economic game-changer for the sector.
The deal presents a substantial opportunity for textiles exports, granting access to a $118 billion US global imports market encompassing textiles, apparels, and made-ups. With the US currently being India’s largest export destination, accounting for approximately $10.5 billion in exports, including 70% apparel and 15% made-ups, this agreement holds immense potential.
The removal of 18% reciprocal tariffs on all textile products, including apparel and made-ups, is expected to eliminate the previous disadvantage faced by Indian exporters. This move positions them favorably compared to competitors like Bangladesh, China, Pakistan, and Vietnam, who have higher reciprocal tariffs. The Ministry noted that this shift in market dynamics is likely to prompt significant reconsideration by major buyers in terms of their sourcing strategies.
The agreement is also seen as a means to enhance cost competitiveness within the industry and mitigate risks by sourcing intermediates for the textiles sector from the US. This strategic move is anticipated to promote the manufacturing of value-added textiles domestically, fostering diversification in production and exports. Additionally, the deal is expected to create more job opportunities and attract investments from US entities, according to the Ministry.
The framework of the US trade agreement marks a significant milestone for India’s textiles and apparel sector.
