India textile dilemma: Can exporters survive the new US tariffs?

At first glance, several of the countries, including India, are set to be impacted by this move, where the US plans to impose tariffs on countries violating forced labour regulations. However, an exemption titled “Textile Mechanism” allows these countries to avoid steep tariffs if they increase the use of US-origin inputs through a barter system, leading to lower tariff rates.

This means a reduced duty rate directly linked to the volume of US textile inputs purchased by the ** economies named by the USTR. Countries such as Bangladesh and Vietnam are already operating on reduced tariffs in exchange for US cotton, helping reduce production costs and emerging as favourable sourcing destinations.

India has not yet decided on the direction it would take when the tariffs under Section *** go in place, but the country has already waived duty on cotton imports till October this year. Still, what about the idea of using US raw material inputs such as cotton? Are Indian exporters and manufacturers thinking about it?

Sravanti Kancharla, executive director of Supriya Spinning Mills Pvt Ltd and vice chairperson of the women entrepreneurs wing at AP Chamber of Commerce and Industry Federation, in an interview with Fibre*Fashion, said India has a strong domestic cotton ecosystem, and that is what more spinning mills are built around.