The historic signing of the Free Trade Agreement (FTA) with the UK, ongoing negotiations with the European Union, and steady progress toward a Bilateral Trade Agreement (BTA) with the United States had signalled positive momentum in India’s global trade efforts.
However, the sudden announcement by the U.S. of a 25% tariff along with penal duties has come as a shock to both Indian exporters and U.S. importers. This unexpected move could potentially disrupt export flows in the short term, commented the Southern India Mills’ Association (SIMA).
In a press release issued today (31st July 2025), Sundararaman, Chairman, SIMA, stated that while the industry was celebrating the progress of the India-UK Free Trade Agreement (FTA), the sudden announcement by the U.S. has come as a shock, posing a serious setback that could undermine India’s overall textile export performance in the short term.
He has said that with the festival season fast approaching, the sudden tariff announcement might severely affect the summer season export orders for India.
Sundararaman highlighted that India exports approximately USD 11 billion worth of textiles and clothing to the U.S., which accounts for nearly 30% of the country’s total garment exports.
He further noted that India’s share in the U.S. garment import market has grown from 4.5% in 2020 to 5.8% in 2024, reflecting a positive trajectory.
He pointed out that Indian exports of made-ups to the U.S. market, currently attracts 9.6% duty and readymade garments face duties up to 16%, which significantly affects competitiveness.
SIMA Chairman has stated that while the 25% tariff may appear tolerable when compared to those imposed on competing countries, the real concern lies in the proposed penal tariff, the implications of which may become evident only at a later stage.
He has urged the Prime Minister Narendra Modi to take up the issue with the U.S. President, seek the withdrawal of the penal provision and expedite the bilateral negotiations scheduled for October–November 2025.
Sundararaman expressed confidence in the negotiation capabilities of the Prime Minister and the Minister of Commerce and Industry, adding that the industry remains hopeful for a favourable agreement in the near future.
