US 500% Tariff Threat: Garment Exporters Face Risks as Traders Prepare for Upcoming Challenges
As Indian garment manufacturers gear up for the upcoming US fall-winter season, they face a looming threat that could drastically impact their export prospects. A proposed 500% tariff on countries trading with Russia has raised concerns among exporters, who report a significant shift in buyer sentiment. Many potential clients are now hesitant to place orders, fearing the financial implications of such tariffs. This uncertainty comes on the heels of a previous 50% tariff imposed by the US last August, which has already strained the industry.
Exporters Express Concerns Over Tariff Threat
The potential imposition of a 500% tariff has left Indian exporters anxious about their future. Vijay Agarwal, chairman of the Cotton Textiles Export Promotion Council, highlighted the drastic change in buyer behavior. Previously, many buyers were considering shifting orders to India, but now they are questioning the viability of such decisions. “They have started writing to us, asking what happens if this 500% tariff is imposed, who will take the guarantee,” Agarwal stated. This shift in sentiment is particularly alarming as the industry has yet to recover from the earlier 50% tariffs, which forced many exporters into survival mode.
The US is a crucial market for Indian apparel and textiles, accounting for approximately 28-30% of the country’s exports. In the fiscal year 2024-25, India exported textiles and apparel worth $37 billion. However, since the introduction of the previous tariffs, the sector has struggled to regain stability. Data from the Confederation of Indian Textile Industry indicates that apparel exports saw only a marginal increase of 2.28% between April and November 2025, while textile exports experienced a decline of 2.27%.
Manufacturers Face Tough Decisions
Despite the looming threat of tariffs, many manufacturers feel they have no choice but to continue production. Agarwal emphasized the uncertainty surrounding US tariffs but acknowledged the necessity of manufacturing goods. “We will have to take the risk,” he said. Some companies have already absorbed significant losses to maintain their export lines. Rajat Jaipuria, managing director of Rajalaxmi Cotton Mills, shared that they have offered deep discounts to keep exports flowing, hoping for a resolution to the tariff issue.
Jaipuria’s company, which employs around 8,000 workers, has commenced production for the fall season. However, he warned of dire consequences if the proposed tariffs are enacted. “A 500% tariff would effectively amount to an embargo,” he cautioned, expressing uncertainty about how factories could continue operating if exports to the US were halted.
Shifts in Buyer Preferences
As the situation unfolds, US buyers are already exploring alternatives to Indian suppliers. Executives in the industry have noted that stress signals are emerging, particularly in Tiruppur, a hub responsible for nearly 90% of India’s knitwear exports. This shift underscores the mounting pressure on the supply chain as manufacturers grapple with the potential fallout from the proposed tariffs.
The uncertainty surrounding US tariffs has created a challenging environment for Indian garment makers. With the fall season approaching, the industry is at a crossroads, forced to navigate the complexities of international trade while striving to maintain their foothold in a critical market. The coming weeks will be crucial as manufacturers assess their strategies in light of the evolving tariff landscape.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
