US tariffs severely hit India's textile exporters; industry seeks moratorium, raw material reforms: CITI survey

New Delhi [India] October 13 : India's textile and apparel exporters are facing severe disruptions following the United States' imposition of a 50 per cent additional tariff, according to a nationwide survey conducted by the Confederation of Indian Textile Industry (CITI).

The survey revealed that the US, which accounts for India's 28 per cent of total textile and apparel shipments, has become significantly less accessible due to the steep tariff structure, eroding India's export competitiveness.

Nearly one-third of the respondents reported a turnover decline of more than 50 per cent following the tariff increase. The major contributing factors included requests for price discounts from US buyers (30%), order cancellations or postponements (25%), and a reduction in order volumes (20%).

Around 85 per cent of the firms reported inventory build-up due to declining orders, while two-thirds were compelled to offer discounts, mostly around 25 per cent, to retain business in the US market.

Liquidity pressures have intensified sharply, with 82 per cent of respondents citing extended credit cycles, and more than half reporting an increase of three to six months. Around 40 per cent noted that their working capital requirements had risen by over 30 per cent, reflecting severe cash flow challenges across the value chain.

More than half of the respondents urged the government to announce a moratorium on repayment of existing loans, while 42 per cent recommended collateral-free loans to ease the financial burden.

About 50 per cent of the surveyed also sought measures to improve raw material competitiveness by removing import barriers such as Quality Control Orders (QCOs), import duties, and other restrictions.

The survey highlighted a series of policy suggestions, it includes fast-tracking Free Trade Agreements (FTAs) with key global markets such as the EU and providing interest subvention and financial relief to the industry to address liquidity constraints. CITI also asks for introducing a Focus Market Incentive Scheme for US-bound exports and educing corporate income tax or granting tax holidays to help ease the financial crisis.

India currently faces the highest tariff rate among major textile-exporting nations, 50 per cent, compared with 20 per cent for Bangladesh and Vietnam, 19 per cent for Indonesia, Pakistan, and Cambodia, and 15 per cent for Turkiye and the EU.

CITI has called on the government to take urgent measures to safeguard employment, support exporters, and restore competitiveness in the textile and apparel industry. The body said it would continue to engage with policymakers and stakeholders to push for targeted relief.

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