Textile shares drop as Trump raises tariffs, causing worries
Trump’s decision to increase tariffs to 50% is causing problems for Indian textile companies and exports.
Let’s see how this might affect the market and jobs in the industry.
Indian textile stocks are dropping today as investors are worried about the US decision to double tariffs on Indian imports. The US has now raised duties on textiles and clothing to 50%.
This has led to a drop in share prices for major textile companies like KPR Mill, Gokaldas Exports, Trident, Vardhman Textiles, Arvind, and Welspun Living, with some losing up to 3% in intraday trading.
Why tariffs affect textiles
This isn’t the first time this has happened. US President Donald Trump recently signed an order to add another 25% duty on Indian imports, bringing the total to 50% on items like clothes and fabric, effective August 27.
Production in textile centers like Tiruppur, Surat, and Noida has slowed or stopped because of the high 50% import tariff on Indian textiles.
The Federation of Indian Export Organisations (FIEO) says about Rs 72,000 crore in exports is now at risk.
This also worries people about losing jobs, as many workers rely on this sector.
Industry groups are worried that over half of the textiles sent to the US now face a cost disadvantage compared to countries like Vietnam and Bangladesh.
US depends on Indian textiles
The US is India’s biggest buyer of textiles. Higher tariffs could impact about 55% of the shipments they get. But now, India’s products face higher tariffs than countries like China (30%), Vietnam (20%), Indonesia (19%), and Japan (15%).
This makes buyers consider shifting orders to other markets.
Market reaction: Shares fall
Investors are reacting to these concerns. S P Apparels dropped 1.4%, and Siyaram Silk Mills fell 1.6%. Others like Raymond dropped 1.9%, Sai Silks (Kalamandir) fell 2%, and Kitex Garments dropped 5% – the biggest loss for the day.
Even midcap exporters are affected.
Vardhman Textiles fell 2.2% to Rs 389.20, Ambika Cotton Mills lost 0.6%, and Welspun Living and Gokaldas Exports dropped nearly 2% each. Some of India’s top textile exporters are Gokaldas Exports, Vardhman Textiles, Arvind, Welspun India, Shahi Exports, Raymond, Pearl Global, and Alok Industries.
With this new tariff policy, these companies are now directly affected by the US tariffs.
Government tries to help In a related move, the government is trying to ease the burden with new relief measures.
They have extended the exemption of import duty on cotton until December 31, 2025. This is meant to help textile mills and exporters with their costs. Reports also say the government is working on other ways to soften the impact, such as signing Free Trade Agreements (FTAs) with more countries.
