India is closely analysing the implications of the US “America First” trade policy, particularly its potential impact on the textile sector, a key component of bilateral trade between the two nations. A government official revealed that the White House’s directive to the United States Trade Representative (USTR) to pinpoint countries for potential bilateral or sector-specific trade agreements is being viewed with cautious optimism.
The focus is on understanding how the USTR’s identification process might open or close doors for Indian textile exports. “We are studying the memorandum to determine whether it will impact India. There could be positive outcomes, particularly for specific textile segments, and if there are negative impacts, we will assess if mitigation is needed,” the official stated. The US remains India’s largest trading partner, with textiles playing a significant role in this relationship.
Initial assessments suggest no immediate cause for alarm within the textile industry. “At this stage, based on initial reading, there is no immediate action required,” the official confirmed. However, the government is actively engaging in cross-ministry discussions to ensure all relevant sectors, including textiles and related industries like yarn and apparel manufacturing, are prepared for potential shifts in US trade dynamics. “Talks with each ministry are underway to ensure they are informed, so they can assess the situation,” the official explained, emphasizing the importance of a coordinated approach.
A key factor influencing future trade discussions is the pending confirmation of key US trade officials. “Confirmations will take a bit of time. Once confirmations happen there will be a discussion. India and the US are good trading partners,” the official noted, highlighting the established trade relationship and the expectation of continued dialogue.
The USTR’s mandate to identify potential trade agreement partners aims to secure greater export market access for American products. While this could present challenges for some Indian textile exporters, it also offers potential opportunities for strategic partnerships and niche market penetration.
The official also touched upon the US withdrawal from the Paris Agreement and its potential impact on the Indo-Pacific Economic Framework for Prosperity (IPEF), suggesting that while the withdrawal raises questions, participation in green initiatives, including sustainable textile production, remains a possibility.
Ultimately, the official stressed the strong existing trade ties between India and the US, indicating that initial interactions between the two nations will likely be built upon this foundation. The textile industry, a significant contributor to this partnership, will be watching closely as these developments unfold.
