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Textile Sector – market share gains ahead


US imposition of reciprocal tariff of 26% on India exports is relatively positive for textile sector considering the imposition of higher tariff on countries such as China and Vietnam, making India more cost competitive in the global markets. US already impose a tariff in the range of 6-33% on exports of Indian textile products (constitutes ~28-30% of overall US textile imports).
US tariff rate on made made products is 33% while on other textile products such as bed sheets, terry towel, woolen textile and cotton apparel is in the range of 6 - 16% which might get impacted by higher tariff rate in the near term. On the other hand, reciprocal tariffs imposed on countries like China (34%; earlier 20%; total 54% reciprocal tariff), Bangladesh (37% reciprocal tariff) and Vietnam (46% reciprocal tariff) are higher when compared with India. China, Vietnam and Bangladesh are top 3 textile products exporters to US followed by India.
China’s share in the US exports is declining in post covid era with India gaining marker share. The imposition of reciprocal tariff is relative positive for Indian textile players as it will make India cost competitive in the global textile market, especially competing with leading exporters such as Vietnam and Bangladesh.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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