The recent announcement of a 10 per cent tariff hike on Chinese imports by the US could create a significant opportunity for India to capture a larger share of the US market.
However, India's ability to fully capitalize on this situation is limited by factors such as its production capacity, which cannot match China's scale, and competition from other exporting nations also vying for a bigger piece of the US market.
Acknowledging the temporary benefit, Indian textile industry leaders however, advocate caution. N Thirukkumaran, General Secretary, Tiruppur Exporters Association (TEA) emphasizes on enhancing long-term competitiveness over short-term gains while Sanjay K Jain, Textiles Committee, Chairman, ICC Textiles Committee opines, India should aggressively pursue this opportunity Highlighting the importance of the US market for the country’s textile industry, Ashish Gujarati, Past President, SGCCI notes, India can strengthen its position there.
Offering a more nuanced perspective, Rahul Mehta, Chief Mentor, CMAI states, while high tariffs protect domestic industries, they also increase production costs for those relying on imports. He raises concerns about the potential impact on US consumers and the feasibility of relocating industries to the US. A massive increase in tariffs may not be in the US's best interest, he opines.
The US administration had also planned a 25 per cent tariff hike on goods from Mexico and Canada but postponed it after both nations agreed to address illegal immigration and drug trafficking.
Currently, China holds a 25 per cent share in the US textile and apparel import market. As per OTEXA data, China supplied 24.23 per cent of the total $99.125 billion in US textile and apparel imports during January-November 2024. The 10 per cent tariff increase will make Chinese textiles and apparel more expensive for US consumers, potentially slowing imports from China and creating opportunities for other suppliers, including India.
Second-largest garment supplier to the US after China, Bangladesh faces challenges recovering from political instability in late 2024. This situation could further enhance India's prospects in the US market.
