The introduction of increased tariffs is poised to create substantial disruptions within the Indian fashion industry, influencing aspects ranging from production chains to pricing methodologies and consumer purchasing patterns. A recent directive from President Trump has instituted elevated tariffs on key apparel-manufacturing nations, including China, Vietnam, Cambodia, and Bangladesh. Vietnam, having ascended to the position of the second-largest apparel exporter to the US after China, is set to incur a significant 46% tariff, whereas Bangladesh will face a 37% duty. Vivienne Westwood Lit Up the Gateway of India, With Raindrops Welcoming the Runway.
The strategic intent behind these tariffs seems to revolve around incentivizing a shift of manufacturing back to the United States. This dynamic presents brands with two primary courses of action: either absorb the rising costs or elevate their retail prices. Currently, a significant number of companies have chosen to pass the cost burden onto consumers.
Conversely, should brands decide to internalize these elevated costs, they risk tighter cash flow implications, which may stifle expansion and adversely affect job retention in the sector.
Future Prospects for Indian Fashion
Looking forward, India could experience considerable advantages from these developments. With a 27% reciprocal tariff in place, India is emerging as a competitive hub for the apparel and textile industries. As the US endeavors to fulfill its clothing and textile requirements, India’s positioning is anticipated to strengthen, rendering it a more attractive alternative to higher-cost competitors like Vietnam and Bangladesh. The White Lotus Season 3: Loud Luxury and Brands Galore.
India, while being a significant apparel exporter, faces considerable competition from smaller nations like Bangladesh, which have shown robust performance in this arena. Despite this, China continues to dominate globally as a key apparel supplier, with Vietnam, Thailand, and Sri Lanka also becoming important production centers. The imposition of high reciprocal tariffs on these countries creates a potential opening for Indian textile manufacturers to acquire a larger share of the US market. The inflated tariffs on Chinese and Bangladeshi exports present an opportunity for India to increase its market penetration, draw in relocated manufacturing operations, and enhance its export activities to the US.
Additionally, the gems and jewellery sector is an integral component of India’s export landscape, significantly contributing to trade with the US as well as other international markets. India accounts for approximately 30% of the US’s jewellery imports. Prior to the introduction of the 27% country-specific tariff, analysts had projected challenges for this sector. Although gems and jewellery once dominated India’s export profile to the US, it has now been overtaken by products such as the iPhone and electrical goods; nevertheless, it still constitutes about 13% of India’s overall export portfolio.
Given this tariff advantage, India is well-positioned to increase its market share in the US. Ongoing trade negotiations hold the potential to further fortify India’s position—particularly if India offers zero-duty imports of cotton in exchange for sector-specific concessions regarding apparel exports. Experts suggest that this could serve as a pivotal transformation for the industry.
(The above story first appeared on Today News 24 on Apr 04, 2025 10:38 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website todaynews24.top).
