New Delhi, February 11 (IANS). The Indian textile (export) sector has got a big relief after America reduced the tariff (import duty) imposed on Indian goods from 25 percent to 18 percent. According to a report released on Wednesday, the outlook of this sector has now been increased from ‘negative’ to ‘stable’.
The report of rating agency ICRA states that the earnings from textile exports may increase by 8 to 11 percent in the coming financial year 2026-27. However, exports are expected to decline by 3 to 5 percent in the financial year 2025-26.
The report states that the recent trade talks between India and America have brought relief to the sector. Although the profit of companies may decline to about 7.7 percent in the financial year 2026, it is expected to increase again to about 9.5 percent in the financial year 2027.
India’s textile exports stood at $16 billion in the financial year 2024-25, of which about one-third went to America.
Jitin Makkar, senior vice president and group head, corporate ratings, ICRA Ltd, said export-based industries like textiles, diamond and leather had suffered significant losses due to the US increasing tariffs last year.
He said textile exporters had to give discounts to their American customers in the last few months, which reduced their profits by about 2 percent.
The report also said that tariff cuts by the US, India-Europe Free Trade Agreement and other bilateral agreements will strengthen India’s manufacturing exports in the times to come.
The tariff reduction comes at a time when global trade remains volatile. This will provide relief to Indian exporters and improve their cost competitiveness.
This will especially benefit labour-intensive industries like textiles, cut and polished diamonds, marine products and footwear sectors.
However, ICRA believes that in the long term, Indian companies will adopt the strategy of expanding their markets in different countries to reduce risks, so that they do not depend too much on any one country.
–IANS
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