It is not one of relief, more like a continuing sigh of frustration coming from sourcing nations across South Asia.
Heavily negotiated U.S. tariffs and deals were put on hold, following the Supreme Court ruling limiting President Trump’s tariff powers.
Industry analysts across the region described the latest development as being “back to the starting point.”
Over the past year, exporters have described feeling riled up, confused and angry as they navigated constantly shifting strategies. Sourcing nations were quickly pitted against one another, racing to negotiate better terms while global brands tracked geopolitics and redistributed orders to minimize risk. India, for example, began at a relative advantage with a 27 percent tariff in April 2025, only to see it raised to 50 percent and then potentially reduced to 18 percent earlier this month.
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“Without a doubt, the developments of Feb. 20 have cast a fresh spell of uncertainty,” said Ashwin Chandran, chairman of the Confederation of Indian Textile Industry (CITI).
In India, the frustration is palpable.
A recently concluded trade deal with the U.S. had injected renewed optimism into the sector. With the Indian delegation’s trip to the States to finalize the deal now on hold, industry leaders said they felt “crushed” at losing their perceived advantage.
According to the Indian Ministry of Textiles, textile and apparel exports reached $37.54 billion in calendar year 2025. A key highlight was diversification, with export growth across 118 destinations compared to 2024, reflecting broader market resilience.
Yet the U.S. remains India’s largest market. The Interim Agreement on reciprocal trade announced on Feb. 2 was viewed as a stepping-stone toward a comprehensive Bilateral Trade Agreement and hailed as a historic milestone by both governments and business leaders. The reduction in tariffs from 50 percent to 18 percent had appeared to restore momentum to Indian exporters.
In Colombo, the impact is being assessed with equal urgency.
Sri Lanka’s total textile and apparel exports reached $5.02 billion in 2025, up from $4.76 billion in 2024, with approximately 39 percent going to the U.S. Exports to the U.S. grew 2.15 percent despite tariff turbulence, while shipments to the European Union rose 12.48 percent as diversification efforts gained traction.
Yohan Lawrence, secretary general of the Joint Apparel Association Forum (JAAF) Sri Lanka, said the standard 10 percent tariff “is really good in some aspects.”
“It doesn’t give one country an advantage over another, and on the face of it we have always argued for parity of tariffs—so if we are getting that, and it is also lower than the final negotiated tariffs, that is good,” he said.
Still, he cautioned that “no one knows where this is going. Business needs stability, and this will once again lead to short-term decisions by the brands,” he added.
In Dhaka, the mood is similarly cautious.
“It did show us the power of the U.S. and the insecurities of the region. Countries have had to give away sops to the U.S. just to fight the competition from the others,” said Mustafiz Hossain, a manufacturer in Dhaka.
Bangladesh, too, has navigated political shifts alongside trade turbulence. Elections in February which brought the Bangladesh Nationalist Party (BNP) back to power were closely watched as a potential turning point after 18 months of economic strain.
There is cautious hope that lower tariffs may reduce costs and stimulate demand, but uncertainty remains the dominant emotion.
Manufacturers also expressed mixed reactions.
On one hand, they were encouraged that lower tariffs could spur consumption. On the other, they worried that unpredictable policy shifts could alter buying patterns in the short term.
“Tariff fluctuations are causing global retailers to cut down and plan imports in smaller volumes,” said Mahmudul Hasan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Bangladesh’s total readymade garment (RMG) exports reached $38.82 billion in 2025, with $7.54 billion—or 19.4 percent—going to the United States. In the first quarter of 2025, Bangladesh was the fastest-growing apparel exporter to the U.S., with a 26.6 percent increase in value. However, monthly exports in December fell 14.2 percent year-on-year.
There was much to look forward to, manufacturers told Sourcing Journal, after a reciprocal trade deal signed between the U.S. and Bangladesh on Feb. 9, brought the tariff down from 20 percent to 19 percent, along with an important agreement on zero tariffs on certain apparel, provided the garments are made using U.S.-origin cotton or man-made fibers.
Now, the turbulence might not be over.
In recent posts on Truth Social, President Trump threatened to use “different tariff powers to levy duties in a much more powerful and obnoxious way,” comments that are now being parsed for potential repercussions.
Analysts say there is hope that the region could focus on rebuilding economic bridges without the added strain of tariff competition. With a new government in Dhaka, there is cautious optimism that tougher economic frictions with New Delhi may ease.
“The competitive edge between the exporting nations cannot be wished away,” said a leading manufacturer in New Delhi, “but we can perhaps find a way to bolster our own position and combat the uncertainty, instead of letting it divide us further into economic chaos.”
