The U.S. is the dominant market for Indian home textiles, contributing to nearly 75% of total exports in the segment. While some exporters were able to accelerate shipments ahead of the August 27 deadline, the bulk of trade will now be exposed to these elevated tariffs. Analysts believe the loss of price competitiveness may significantly alter purchasing patterns among American retailers. †

According to Crisil, the sector’s operating profitability could shrink by 100–150 basis points in FY26 if the tariffs remain for the rest of the fiscal. The average margin stood at around 13.5% in FY25. This erosion could delay expansion plans and squeeze liquidity for small and mid-sized exporters. †

Major players like Welspun India, Trident, and Indo Count, who had been optimistic about U.S. demand recovery earlier this year, may now see order volumes stagnate or even decline. Industry bodies have urged the Indian government to take up the issue diplomatically and seek a rollback or phased exemption. †

Why These Tariffs Hurt More Than Before

The home textile segment has historically been one of India’s top-performing export clusters, benefiting from skilled labor, cotton availability, and scale. However, the new 50% tariff places Indian exporters at a significant disadvantage compared to competitors in countries like Vietnam, Turkey, and Mexico who currently enjoy better access to the U.S. market. †

“We cannot match quality with such pricing pressure,” said one exporter from Karur, Tamil Nadu. “Our margins are already thin and this tariff makes us unviable for major U.S. buyers unless they accept a premium for Made in India goods.”

Crisil warns that the longer the tariffs stay, the more permanent the shift in global sourcing strategies will become. American importers, including big-box retailers, are known for price sensitivity. Once sourcing moves to alternate countries, regaining lost ground could take years. †

Can Exporters Adapt Fast Enough?

Exporters with exposure to other regions such as the EU and Middle East are trying to rebalance order flows. Some companies are exploring product diversification to include categories that are not subject to tariffs. Others are absorbing part of the tariff hit to maintain long-standing client relationships.

However, not all exporters have the flexibility or scale to make those adjustments. Small-scale players may face reduced working capital, production slowdowns, or job cuts. Industry associations fear the consequences may extend to thousands of informal workers who depend on these factories for livelihoods. †

Tools to Help Navigate Tariff Uncertainty

Many textile companies are now leveraging digital platforms to better manage costs and logistics. Businesses affected by U.S. tariffs are encouraged to use advanced tools like the USA Tariff Calculator to evaluate scenarios and set competitive pricing models. These tools offer real-time data and can help exporters remain strategic even amid policy shocks.

Though the short-term impact appears bleak, stakeholders hope for constructive dialogue between Indian and U.S. trade officials in the coming months. Whether that results in a tariff rollback or alternate relief remains to be seen, but the pressure on Indian textile exporters is already very real.