Threatening India’s Spring-Summer Season
Escalating trade tensions between the United States and India are creating significant disruptions for the apparel export industry, with stakeholders warning of a steep decline in orders if current tariff issues are not resolved swiftly.
Several exporters have confirmed that orders are now on hold, with buyers from the US — India’s largest apparel export market — becoming increasingly hesitant due to uncertainty around potential tariff hikes.
“US tariffs are creating a big roadblock,” said Animesh Saxena, MD, Neetee Clothing. “The industry stands to lose a lot of business if this continues. We hope both governments can reach an agreement soon.”
The timing is particularly critical. The Spring-Summer season, which traditionally brings a surge in orders and production activity, is at risk of being severely impacted. With lead times tightening and planning windows closing, exporters warn that continued uncertainty could result in major financial losses and missed opportunities.
“Spring-Summer is the most important season for us, if the tariff issue isn’t resolved quickly, we may not get the kind of order volumes we rely on, “ said HKL Magu, MD, Jyoti Apparels.
The apparel industry — already grappling with global inflation, rising production costs, and geopolitical volatility — views this latest tariff standoff as yet another blow to recovery and growth.
Calls are growing for urgent diplomatic engagement to de-escalate the situation and provide clarity to businesses on both sides of the trade corridor.
ICRA views on Indian apparel and fabric sector
India and the UK recently concluded trade talks, and an agreement was reached on May 6, 2025, after three years of negotiation. The bilateral trade deal providing concessional duty / eliminating duty on select goods would lead to a significant rise in trade volumes and hence earnings. While the broad terms have been agreed upon, the Free Trade Agreement (FTA) between the two countries is expected to be operational in CY2026, subject to legal review.
The sudden tariff hike has come as a complete shock to the industry. When the government asked us earlier what would happen if such measures were implemented, we clearly warned that many factories would be forced to shut down, leading to massive unemployment. No one anticipated such a steep increase. This move will hand a significant advantage to competitors like Bangladesh and Vietnam, as global orders are likely to shift there instead of coming to India.
Gautam Nair, MD, Matrix Clothing now Gokaldas Exports
India will be in deep trouble if corrective action on duties is not taken immediately. This issue needs urgent attention, as any delay could push valuable export orders out of the country, directly impacting our manufacturing base and employment.
Anika Passi, Country Manager, Centric Brands
US tariffs are creating a big roadblock. The industry stands to lose a lot of business if this continues. We hope both governments can reach an agreement soon.
Animesh Saxena, MD, Neetee Clothing.
