CHANDIGARH: With the imposition of 25 percent tariff along with an unspecified penalty by the United States it is likely to severely impact India’s exports of textiles to the US market and thus Pakistan, Bangladesh, Turkey, Vietnam, Egypt and Italy would be the gainers, increasing their market share in the US.
Panipat which is known as the `Textile City’ of India as it is having export volume of around Rs 20,000 crore per year, the exporters here who were already reeling from a downturn in exports for the past three years due to the Russia-Ukraine war, inflation across European and South American markets and rising freight charges.
They are now adopting a wait and watch policy and are holding back to take new orders due to the prevailing uncertainty. Talking with this newspaper, Vinod Kumar Chairman of Haryana Chamber and Commerce Industry (Panipat Chapter) said that due to decision of the US to levy 50 per cent tariff on Indian goods has hit the textile industry of Panipat hard.
``We export textiles worth Rs 20,000 crore per annum, and of this 60 percent (that is Rs 12,000 crore) are exported to the US, from home textile items (bath beds, curtains, cushions, puff, towels, blankets, bed sheets) to floor covering items such as carpets and rugs," he says.
``At present the tariff on textile goods was 10 per cent, but as it will be increased as announced by the Trump administration it will benefit Pakistan Bangladesh, Turkey, Vietnam and Italy as these countries were our competitors but the major import of textile good to US was from India as now, ’’ Kumar said, adding that; ``Now we are adopting a wait and watch policy, as the orders which were already placed with us by the firms or importers from America, have started doing negotiations with us and demanding a 20 to 25 per cent discount on those orders."
"We are not expecting any new orders as present order have been put on the hold as we do not know what is expected in the coming days, will the authorities’ in US level 50 per cent tariff or it will be only 25 per cent or will be they reconsider their tariff decision," Kumar says.
The exporters says that there are around 500 exporters in Panipat who employ approximately 2 lakh work force as these export units run eight hours daily.
``Now in the coming days if the orders from US drop then there is possibility to retrench the work force thus it will lead to unemployment. We do not want to do it but will have no option,’’ Kumar adds and added that the government should give some incentive to the industry.
He says that no other country can cover the gap if the export orders from US drop, as besides America the exporters from here are exporting textile items to European countries, South Asia and South America.
Meanwhile Lalit Goyal, Chairman, Handloom Export Promotion Council (HEPC) and president of Panipat Exporters’ Association, said that the total textile export to US is 11 billion Dollar (Rs 96,000 crore) as rest about Rs 80,000 crore is of garments and the made-up (white sheets, blanket, curtains, table covers, towels).
While the floor covering items (carpets, bath mats, rugs) worth Rs 16,000 crore were exported due to tariff hike export worth Rs 9,600 have been hit. While towel, cushion cover, curtains and other items worth Rs 3,000 crore from Panipat also will be hit. This sector is highly labor intensive sector and this sector has further liked to thousands of cottage and small scale industry approximately 35 to 40 lakh weavers will be affected.
``Overseas buyers also started holding back orders after the announcement of the new tariff structure. Since rugs and carpets are considered luxury items in the US market, the expected rise in product costs is likely to hurt business. Countries like Turkey and Egypt, which produce fine-quality machine-made bath mats and carpets, stand to benefit because only a 10% tariff is applied on their products. Pakistan and Bangladesh may also gain some advantage, as the tariff on their exports is 19%, lower than India’s,’’ he said.
Interestingly despite global uncertainties, exports of major textile commodities increased 5.37 per cent to USD 3.10 billion in July 2025 compared to USD 2.94 billion in the year-ago period. As per estimates recently released by the Directorate General of Commercial Intelligence & Statistics (DGCIS) for the period April-July 2025, cumulative textile exports rose 3.87 per cent to USD 12.18 billion against USD 11.73 billion a year ago.
The total exports of the six major textile commodity groups crossed USD 3.1 billion in July 2025, showing resilience against mixed global trade conditions. Sustained demand in ready-made garments, jute, carpets, and handicrafts contributed significantly to the growth momentum. The Ready-made Garments (RMG) exports rose to USD 1.34 billion in July 2025 from USD 1.28 billion in July 2024 (4.75 per cent growth). While the cumulative exports for April-July 2025 stood at USD 5.53 billion compared to USD 5.13 billion last year, recording 7.87 per cent growth. The industry’s performance highlights India’s diversified product strength, spanning from cotton and MMF-based textiles to traditional handicrafts and eco-friendly jute.