India's Counter To Trump's 50% Tariff: Delhi Plans Outreach Programmes In 40 Nations To Push Textile Export

(MENAFN- Live Mint) US tariffs: India plans to counter the United States' hiked 50 per cent tariffs on textiles , through dedicated outreach programmes in 40 countries, an official told PTI.

The official added that these 40 countries include, Australia, Belgium, Canada, France, Germany, Italy, Japan, Mexico, Poland, Russia, Spain, South Korea, Turkiye, the Netherlands, the United Arab Emirates, and the UK.

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According to the official, in each of the 40 countries, the proposal is to“pursue a targeted approach, positioning itself as a reliable supplier of quality, sustainable, and innovative textile products”. They added that the lead role of the Indian industry, including EPCs and Indian Missions in these countries, will be important, the report added.

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According to the official, India already has export ties with more than 220 countries. However, the 40 importing countries listed for outreach hold the real key to diversification.

“Together, these 40 countries represent over $590 billion in textile and apparel imports, offering vast opportunities for India to enhance its market share, which currently stands at only around 5-6 per cent. Recognising this, the government is planning dedicated outreach programmes in each of these 40 countries, with a focus on both traditional markets and emerging markets,” the official added.

The steep 50 per cent tariff on Indian goods entering the United States, which came into effect from August 27, would impact exports worth more than $48 billion.

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The official also said that Export Promotion Councils (EPCs) will be the backbone of India's diversification strategy by conducting market mapping, identifying high-demand products, and linking specialised production clusters like Surat, Panipat, Tirupur, and Bhadohi to opportunities in the top 40 countries.

They will lead India's participation in international exhibitions, trade fairs, and buyer-seller meets, while also running sector-specific campaigns under a unified Brand India vision.

The councils will further guide exporters on using free trade agreements (FTAs), meeting sustainability standards, and securing necessary certifications.

"FTAs and negotiations with several of these geographies will help make Indian exports competitive, and there is a huge potential for growth in these areas," the official added.

Which sectors are likely to be most hit?

Donald Trump's tariffs on Indian imports into the US, have doubled from 25 per cent since April, to 50 per cent from August 27, after he imposed“punishment” for oil purchases from Russia amid the Ukriane invasion.

Domestic sectors that are set to feel the heat include, textiles and clothing, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and electrical and mechanical machinery.

In FY25, the overall size of the textile and apparel sector is estimated at $179 billion, comprising a domestic market of $142 billion and exports worth $37 billion, according to the PTI report.

In the international markets, textiles and apparel import was valued at $800.77 billion in 2024, with India holding 4.1 per cent share in world trade, and ranking as the sixth-largest exporter, amid trade with 220 countries.

Commenting on high tariffs, Mithileshwar Thakur, Secretary General, Apparel Export Promotion Council (AEPC), said the textiles sector, with exports of USD 10.3 billion, is one of the worst-impacted sectors next only to gems and jewellery with USD 12 billion and electrical and mechanical machinery with USD 9 billion exposure to the US market.

"The apparel industry was reconciled to the 25 per cent reciprocal tariff announced by the USA, as it was prepared to absorb a part of the tariff increase. But, the additional burden of another 25 per cent tariff, taking the overall reciprocal tariff against India to 50 per cent, has effectively driven the Indian apparel industry out of the US market as the gap of 30-31 per cent tariff disadvantage vis-a-vis major competing countries like Bangladesh, Vietnam, Sri Lanka, Cambodia & Indonesia," Thakur said.

He said the industry expects some urgent relief in the form of fiscal support from the government to sustain and survive in the US market till favourable terms of trade are restored through a bilateral trade agreement with the US.

"This is extremely critical as it is not easy to recover the lost ground and regain market share, once buyers move away to other cost-competitive locations. In the meantime, we are also intensifying our efforts towards market diversification and looking at every possibility to take advantage of the trade deal with the UK and EFTA countries to control and contain the damage," he added.

(With inputs from PTI)

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