AEPC Urges Government Intervention as US Tariff Crisis Threatens India's Textile Export Sector

The Apparel Export Promotion Council (AEPC) has approached India's Vice President with an urgent appeal for government intervention to address escalating trade tensions with the United States that threaten to cripple the country's textile export sector.

Dr. A. Sakthivel, Chairman of AEPC, recently met with Hon'ble Vice President Shri C. P. Radhakrishnan to discuss critical industry concerns, including the impact of recently imposed US tariffs on Indian textile exports. The Vice President heard the industry's representations and assured that the matters would be referred to the relevant ministries for prompt action.

Crisis in Numbers

The sector is facing an unprecedented crisis following the imposition of a 25% tariff alongside an additional 25% oil-related penalty by the United States. For many large Indian textile exporters, the US market represents approximately 70% of their total exports, making it their single largest destination.

The industry operates on razor-thin margins with significant structural constraints: a four-month work-in-progress cycle, six-month product development timelines, and wage costs comprising 30% of operations—most of which are fixed expenses.

Industry's Desperate Measures

In a bid to retain American customers and maintain production continuity, exporters have already absorbed a 25% price reduction equivalent to the oil penalty. This decision was made with the expectation of an early resolution between India and the US on tariff matters.

However, this strategy has come at a devastating cost. Company profits have been completely wiped out, reserves are being rapidly depleted, and industry leaders acknowledge this approach is viable only as a short-term bridge solution, not a sustainable business model.

Worsening Outlook

The situation has deteriorated further as US buyers begin withholding or cancelling new orders, unwilling to risk mid-cycle tariff escalations. Even with the 25% discounts already being offered, further tariff absorption is commercially impossible, and passing costs to buyers is not a viable option.

AEPC's submission emphasizes that market diversification, while necessary, cannot serve as a short-term solution. Textile sourcing is deeply embedded in long-term buyer supply chains, and developing alternate markets requires two to three years for buyer onboarding, compliance audits, and volume scaling.

Cascading Consequences

The council has warned of severe repercussions at multiple levels. Immediate impacts include production cuts, factory shutdowns, and large-scale job losses. Medium-term consequences involve loss of export earnings and tax revenues, along with structural weakening of the textile value chain. Most critically, the long-term risk involves irreversible loss of market share to competitor nations with preferential trade access.

Call for Action

AEPC has urged the government to pursue the immediate conclusion of an India-US tariff treaty or implement an interim tariff relief mechanism until a comprehensive agreement is finalized. The industry body argues that even temporary relief would restore buyer confidence, protect ongoing work-in-progress, and prevent irreversible sectoral damage.

Dr. Sakthivel emphasized that the textile industry has already absorbed significant losses in national interest to protect exports and employment, but there is no further capacity to withstand such shocks. The chairman warned that delays of even three to six months risk permanent damage to a strategic export sector.

The AEPC has requested fast-track India-US tariff negotiations and authorization of interim protective measures for textile exports pending treaty conclusion. During the meeting, discussions also covered interest subvention schemes and broader market diversification strategies for the sector.

The textile and apparel industry remains a crucial pillar of India's manufacturing economy, providing employment to millions and contributing significantly to the country's export revenues.