US Tariff Hike Threatens Over 2 Million Jobs in Indian Apparel Sector

As per news reports, the recent move by the US administration to impose a 25% tariff on Indian apparel imports threatens to destabilise the Indian textile and garment manufacturing industry. This change reverses India’s previous competitive edge, potentially affecting over 2 million jobs and putting billions worth of exports at risk.

Indian Apparel Industry Faces Major Job Losses Due to New Tariff

The Trump-led administration has revised tariff brackets in a way that significantly disadvantages Indian exporters. The newly imposed 25% tariff on Indian garments erases the competitive pricing edge India enjoyed. Countries like Bangladesh and Vietnam now pay only 20%, while Indonesia and Cambodia face 19% tariffs. This widening gap places Indian manufacturers under immense pressure, as pricing is a critical factor in the US’s apparel import market.

US Market Vital to Indian Apparel Exports

Approximately 33% to 34% of Indian garment exports, valued at $5.333 billion in FY2024-25, head to the US. India holds a 6.1% share in the US apparel import market, which is worth $85.8 billion overall. With these new rates, Indian exporters may struggle to maintain volume, impacting not just exports but also domestic employment across key textile clusters.

Read More: Imposing Tariffs Will Negatively Affect the US Economy More than India's: SBI Research!

Tariff Imbalance Creates Uncertainty in Cost Structuring

A major concern is the lack of clarity regarding an additional unspecified penalty above the 25% tariff. Without transparency on total duties payable, manufacturers cannot determine final product costs, disrupt pricing strategies, and prompt hesitation from international buyers who may prefer sourcing from lower-tariff countries.

Industry Seeks Government Support Measures

Indian textile bodies are urging the government to act swiftly, as per reports. Proposals include enabling raw material access at globally competitive prices to help reduce production costs. There is also demand for a bilateral trade agreement with the US that might reestablish fair tariff treatment and prevent sectoral collapse.

Conclusion

India’s apparel export industry faces a critical test with the US tariff changes. As over 2 million jobs hang in the balance, timely policy interventions and negotiations are essential to restoring competitiveness in global markets and protecting employment in this vital sector.

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