Indian textile exporters target EU, discounts amidst US tariff pressure

Indian textile exporters are turning to European markets and offering discounts to existing customers in the United States to mitigate the impact of steep US tariffs, which have risen to as much as 50%, according to industry executives.

In August, President Donald Trump’s administration doubled tariffs on Indian imports, placing them among the highest imposed on any trading partner. The increased duties have affected a wide range of goods, including garments, jewellery, and shrimp.

Trade discussions between India and the EU are currently in an advanced phase, with negotiating teams working towards finalising a free trade pact by the end of the year. The EU remains India’s largest trading partner for goods, with bilateral trade reaching US $ 137.5 billion in the fiscal year ending March 2024—an increase of nearly 90% over the past decade.

Industry representatives noted that Indian exporters are stepping up efforts to meet the EU’s more stringent standards on chemicals, product labelling, and ethical sourcing. Rahul Mehta, the Chief Mentor of the Clothing Manufacturers Association of India (CMAI), said exporters are upgrading production facilities to comply with these regulations. He also stated that manufacturers are increasingly keen to reduce their dependence on the US market.

The United States was India’s largest destination for textiles and apparel exports in the fiscal year to March 2025, accounting for nearly 29% of total exports worth around US $ 38 billion.

Vijay Kumar Agarwal, chairman of Mumbai-based Creative Group, said that several exporters have begun offering discounts to retain their US customers. He noted that US exports comprise about 89% of his company’s total shipments. Agarwal warned that if the tariff pressure persists, the company could face significant workforce reductions—potentially losing between 6,000 and 7,000 of its 15,000 employees—and may, within six months, consider relocating production to Oman or Bangladesh.