Trump tariff to have short-term impact on textile sector India has relative cost advantage Experts

New Delhi, Apr 3 (PTI) The US retaliatory tariffs will impact the Indian textiles sector in the short-term, however, India still has a relative cost advantage in comparison to other countries, industry experts said on Thursday.
     The US has announced 27 per cent reciprocal tariffs on India saying New Delhi imposes high import duties on American goods, as the Donald Trump administration aims to reduce US' trade deficit and boost manufacturing.
     "The 27 per cent tariff on Indian footwear and garment exports to the US is a significant challenge, especially for businesses operating on thin margins. It will impact pricing and demand in the short term," said Apollo Fashion International President Shiraz Askari.
     However, he also said that compared to countries like Vietnam and Bangladesh, which now face even higher tariffs, India still has a relative cost advantage.
     Echoing similar sentiments, EY India Partner and Retail Tax Leader Paresh Parekh said presently it appears "advantage India" for the Indian textile sector.
     "India competes globally for textile exports with countries like Bangladesh, Vietnam, Cambodia, Sri Lanka, China, Pakistan, etc.
     "Interestingly, as compared to around 27 per cent tariff for Indian imports, these countries have been hit harder by USA tariffs: Bangladesh at 37 per cent, Vietnam at 46 per cent, Cambodia at 49 per cent, Pakistan at 29 per cent, China at 54 per cent, Sri Lanka at 44 per cent, etc," he said.
     The US buys textiles worth over USD 36 billion from India.
     "This situation poses an opportunity for the Indian textile sector to grab and increase its market share in the US. However, there is a risk as well -- if there is slowdown in consumption in the US due to higher prices, the overall US market itself may shrink.
     "The Indian textile sector also hopes to secure further strategic advantage by inclusion of textile in potential "zero for zero" India-USA trade deal if it happens," said Parekh.
     However, Askari also said the textiles industry should focus on other markets also.
     "The focus now should be on improving efficiency, strengthening compliance, and diversifying markets to reduce over-dependence on any one geography. The industry has handled disruptions before, and this is another moment that calls for smart, decisive action," he said.

(This story has not been edited by THE WEEK and is auto-generated from PTI)