India’s Home Textile Exporters Welfare Association, a trade group for manufacturers of rugs, towels and other household linens, said Thursday that it’s been yoked with 17,094 crore Indian rupees—or roughly $2 billion—of orders currently under negotiation or otherwise stuck in limbo because of tariff turmoil stemming from the United States.
Speaking to Moneycontrol, a news outlet based in Mumbai and Uttar Pradesh, HEWAS director Vikas Singh Chauhan said that several buyers have threatened to cancel orders if suppliers don’t halve prices, leaving exporters with “no option but to honor their discount demands.”
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As one of India’s largest trading partners, the United States imported roughly $10.5 billion of its textiles and apparel in 2024, amounting to a 28.5 percent share of the South Asian nation’s exports of the same. On President Donald Trump’s so-called “Liberation Day” earlier this month, India had originally been assigned a reciprocal tariff rate of 26 or 27 percent—a hefty increase to be sure, but one that seemed a bargain compared with those imposed on competitors such as Bangladesh (at least 37 percent, if not 53 percent), Sri Lanka (44 percent), China (145 percent, or up to 245 percent) and Vietnam (46 percent).
But while India could still emerge with an edge when the 90-day pause on the most recent round of tariffs concludes, the impact of the 10 percent “universal” levy on all countries save China, plus the ongoing chaos and uncertainty that has left American importers largely paralyzed, are already leaving their mark, Chauhan said.
“We have also informed the union government that nearly 90 percent of exporters have been impacted by this tariff issue in our segment. My company alone has been hit as orders worth $2 million are stuck,” said Chauhan, who manufactures and exports carpets and bath accessories through Skier Export and Import Private Limited.
Considering the sliver-thin margins that manufacturers already work with, absorbing a 10 percent tariff, as some buyers might demand they do, is a hard ask, Rahul Mehta, chief mentor at Clothing Manufacturers Association of India and managing director of Creative Garments in Mumbai, told Moneycontrol.
There is also a growing concern about how American consumers will react to tariff-fueled higher prices on their products, he said, adding that “if their consumption goes down, then even if we offer the lowest costing goods, their overall consumption will go down and therefore, our demand will go down.”
Kumar Duraiswamy, joint secretary of the Tiruppur Exporters’ Association, agreed. He said that 90 percent of the micro, small and medium-sized enterprises in the Tamil Nadu city face limited capital availability.
“Any crisis in liquidity will imply closure of industries and disruption in the supply chain as well,” he told The Economic Times, a newspaper from Mumbai. “The exporter has to depend on the value chain for all kinds of operations, such as printing, dyeing and yarning, so if a financial issue crops up for the manufacturer, it will impact the entire value chain.”
There is still a chance for a detente. Vice President J.D. Vance is scheduled to meet with Prime Minister Narendra Modi on a four-day visit to India next week, allowing for the forging of a bilateral trade deal. India has already slashed tariffs on more than half of U.S. imports worth $23 billion and is reportedly considering more to stave off further economic hurt. Trump previously referred to India as a “tariff king” because its duties are higher than those of the United States—12 percent, on average, for India versus 2.2 percent for the United States last year. Last year, India had a nearly $46 billion trade surplus with the United States, 5.4 percent increase over 2023.
But it was only in February, soon after Trump’s inauguration, that Modi visited the White House to establish a “mega partnership” with the United States that would more than double bilateral trade to $500 billion.
“The timely conclusion of a bilateral trade agreement between India and the U.S. is crucial to mitigate these tariffs and provide relief to Indian exporters,” Ajay Sahai, director general and CEO of the Federation of Indian Exporters Organisation, told The Hindu.
Gurudas Aras, strategic advisor to several textile companies, told Moneycontrol that the tariffs, negotiations aside, can still put India in a better place than its rivals. The question is whether India will be able to grab this opportunity, he said, “because in the past our country has missed the bus when it comes to the textile industry due to policy delays and segments within the industry working in silos.”
