Despite the uncertainty over tariff hikes by the US as well as the India-US trade deal, export orders continue. Industry sources said that as of now they are not facing any problems in receiving export orders and it is business as usual.
“A lot of the tariff uncertainty has already been factored in and with new tariff hikes being announced by the US on an almost daily basis, buyers are starting to take it as par for the course,” said an industry source, adding that export orders and shipments from US buyers remain on track.
Exporters also remain hopeful that a mini-trade deal between India and the US will be signed before the August 1 deadline, helping them get some concessions and a reprieve from the higher tariff of 26%.
The Indian team for the bilateral trade agreement with the US is set to resume negotiations and will be visiting Washington DC next week, official sources have said, indicating that India is hopeful of finalising a limited trade deal by the end of the month.
However, certain sectors like textiles and apparels and footwear have a competitive cost advantage compared to the reciprocal tariffs faced by other countries.
Mithileshwar Thakur, Secretary General of the Apparel Export Promotion Council (AEPC), said, “The existing tariff of 26% gives India a cost advantage in natural garments vis-a-vis Bangladesh. If a trade deal between India and the US is finalised with even a 15% tariff, India will get a cost advantage vis-a-vis Bangladesh in both natural and synthetic garments. We are awaiting clarity on the BTA. As of now export orders are still coming.”
The US is India’s biggest market for textile and apparel exports. During January-May 2025, US imports of textile and apparel from India were valued at $5.11 billion, a rise of more than 13% compared to the same period last year when the figure stood at $4.51 billion, said a recent release by the Confederation of Indian Textile Industry (CITI).
“We are actively tracking the progress of the latest tariff-related announcements, including their impact on specific sectors, since they concern many countries which are our competitors in the textile and apparel export arena,” said CITI Chairman Rakesh Mehra.
Meanwhile, a new report by GTRI has also warned that India must remain cautious given that the US is proposing new tariffs, the most recent being a 10% tariff on all BRICS nations, including India, for using non-dollar currencies in trade.
“While pushing India to sign such a deal, the US has simultaneously proposed a 10% tariff on all BRICS nations, including India, accusing them of undermining the dollar. It has also introduced a bipartisan bill to impose 500% tariffs on countries that continue buying Russian oil and gas—directly targeting India’s energy security,” the report noted.
These aggressive moves indicate that even after a deal, the US may still impose new tariffs on political grounds. India must factor in these risks, safeguard its strategic and economic autonomy, and ensure that any agreement genuinely serves long-term national interests, it underlined.
