US Tariff Decision Puts Indian Textile & Apparel Exporters At Competitive Disadvantage, Says CITI
The Confederation of Indian Textile Industry (CITI) has expressed serious concern over the United States’ decision to impose a 10 per cent tariff on Indian goods following investigations conducted under Section 301 by the Office of the United States Trade Representative (USTR) related to the enforcement of prohibitions on imports produced with forced labour.
CITI Chairman Ashwin Chandran said the tariff decision could have significant implications for India’s textile and apparel exports, while also creating reputational challenges for the industry.
“The tariff imposition on the issue of forced labour is deeply unfortunate as it does not indicate an expiry date and causes reputational risks. CITI looks forward to the Indian government taking up this issue with the US given the detrimental impact it could have on textile and apparel exports from India,” Chandran stated.
He further pointed out that while several competing sourcing destinations have also been subjected to the same tariff rate, the US has created a pathway for some countries to export specified textile and apparel products without attracting Section 301 tariffs.
“What could raise a serious challenge for Indian textile and apparel exporters is the fact that although many key competitors of ours have also been subject to the same tariff rate, a window has been opened for textile and apparel exports from these countries to enter the United States free of the Section 301 tariffs. This differential treatment risks diverting sourcing orders for textile and apparel items away from India,” he said.
According to Chandran, the tariff could also affect India’s exports of intermediate textile products to other countries that are part of global supply chains serving the US market.
The United States remains the largest export destination for India’s textile and apparel sector, with annual exports to the market typically valued at nearly $11 billion.
CITI highlighted that a recent notice published in the US Federal Register provides for the establishment of Tariff-Rate Quotas (TRQs) for Bangladesh, Cambodia, Indonesia and Malaysia. Under the proposed framework, specified volumes of textile and apparel products from these countries, based on their importation of US textile inputs, would be allowed to enter the US market free of Section 301 tariffs for an initial period of three years.
The industry body noted that such provisions could place Indian exporters at a competitive disadvantage in the US market.
Reiterating the industry’s commitment to ethical manufacturing practices, Chandran said India’s textile and apparel sector operates under a strong legal and institutional framework that prohibits forced labour and follows a zero-tolerance approach supported by compliance and enforcement mechanisms.
He also referred to the Directorate General of Foreign Trade’s (DGFT) notification issued on July 13, which introduced new provisions in the Foreign Trade Policy (FTP) relating to the prohibition of imports produced using forced labour. In addition, India has implemented four Labour Codes aimed at strengthening worker protection and labour rights across sectors.
CITI has urged the Government of India to engage with US authorities on the issue to safeguard the interests of the country’s textile and apparel exporters and maintain India’s competitiveness in its largest export market.
