India can 'seize this moment', says Mahindra

India's textile and apparel exporters have suffered a major blow after the United States raised tariffs on Indian imports to 50%, as it wiped out any limited competitive edge they had over key rival Bangladesh, which faces a lower 20% duty.

- NARAYANAN V

Apparel exporters will now find themselves disadvantaged against other key competitors like Vietnam, and Sri Lanka too. The US accounts for about $10 billion of India's annual textile and garments exports of $37 billion.

"This is a huge setback to the labour-intensive apparel export industry. There is no way the industry can absorb this," Sudhir Sekhri, chairman of the Apparel Export Promotion Council (AEPC), told FE.

Sekhri had earlier warned that even a 25% tariff would severely dent India's export competitiveness, forcing manufacturers to sell below cost and triggering mass layoffs. Textile industry is the country's second-largest employment generator after the agriculture sector, with over 45 million direct jobs.

Industry sources on condition of anonymity said lay-offs would be inevitable if the hefty US tariff persists.

China, which accounts for about a fifth of US apparel imports, is subject to a 30% interim extra US tariff, and US officials have warned of an additional 34% hike if ongoing trade negotiations between Washington and Beijing fail to reach a resolution by August 12.