August 2, 2025

Indian textile companies faced a tough day on the stock market after the announcement of a significant tariff reduction by the U.S. government on Bangladeshi imports. Under the Trump administration, import duties on goods from Bangladesh were cut from 35% to 20%. This move significantly impacts Indian textile firms, which now find themselves at a disadvantage in a crucial market where large revenues are tied to U.S. buyers. Shares of major textile companies like Kitex, Pearl Global, KPR Mill, and Welspun Living saw declines of up to 7% following the news. Investors reacted swiftly, resulting in broad-based selling across the sector. Companies heavily reliant on U.S. sales have started feeling the heat, with stocks such as Gokaldas Exports dropping about 3.1%, while Pearl Global Industries fell 7.2% to ₹1,380.05. Other players in the market also saw declines; Arvind Ltd dropped by 1.8% to ₹310.40, and KPR Mill experienced a drop of 4.3% to ₹1,092. Companies like Welspun Living and Indo Count Industries derive 40-70% of their revenues from the U.S., making them particularly vulnerable to changes in import duties. The reduced duty for Bangladesh now matches the 20% rate that Vietnam enjoys. As a result, Indian textile exporters are now contending with a higher 25% tariff rate on their products entering the U.S. market. This puts additional pressure on Indian firms, especially since Vietnam and Bangladesh have been gaining competitiveness in key apparel segments because of their cost efficiencies. Kitex Garments, which earns a whopping 70% of its revenues from the United States, saw its stock slip by 5%. Other firms like Trident and Indo Count Industries also experienced minor drops ranging from 1% to 2.5%. As analysts point out, this situation spells trouble for Indian exporters. "For Indian exporters in gems, textiles, and auto parts, the impact is immediate and harsh: sectors already operating on slim margins now face a 7-10% cost disadvantage compared to rivals like Vietnam," stated Akshat Garg, AVP at Choice Wealth. The correction in the textile stocks extended a broader downward trend that began on Thursday. The declines weren't isolated to just one or two companies, highlighting a palpable anxiety about the competitive landscape for Indian textiles. Pearl Global and Gokaldas Exports had already shed significant portions of their values, and the fears of mounting margin pressures have disillusioned investors. In a market that had momentarily relished an advantage over Bangladesh, the ire felt by Indian companies now signals renewed uncertainty about global pricing competitiveness. The ability of these companies to sustain their margins while competing with textile exporters from Bangladesh and Vietnam is critical. Gokaldas and Pearl Global, which generate 50–70% of their revenue from U.S. sales, now face significant hurdles. As the sector grapples with this new economic reality, questions remain about the future profitability of Indian textile firms. With competition intensifying and tariffs remaining unfavorable, these companies must strategize effectively to safeguard their market shares and maintain profitability. Investors keen on tracking the developments in this sector should stay alert as further shifts in U.S. trade policy could further complicate the landscape for Indian exporters. It's critical to note that the recommendations, suggestions, and opinions provided are those of experts and do not necessarily reflect the views of The Economic Times. Looking ahead, stakeholders in the Indian textile industry are advised to remain vigilant to adapt to these changes in trade dynamics.

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Tags: Indian textiles, Tariff cuts, Us imports, Bangladesh, Vietnam, Stock market,