In a dramatic move shaking up global textile trade, former U.S. President Donald Trump, now a key figure in the 2025 U.S. election cycle, announced a 35% tariff on textile imports from Bangladesh. The decision — justified under the banner of “America First 2.0” — has caused immediate disruption in South Asian textile supply chains. But while Bangladesh braces for economic headwinds, Indian textile firms are reaping the early rewards.
Indian textile stocks rallied sharply across stock exchanges following the announcement. Companies such as Vardhman Textiles, KPR Mill, Welspun India, and Arvind Ltd saw intra-day surges of 6% to 12%, as investors anticipated a redirection of U.S. orders to Indian mills.
🇺🇸 The Trump Tariff Shock: What Happened?
The 35% tariff on Bangladeshi garments — announced at a campaign rally and confirmed via an executive memorandum — was framed as retaliation against what Trump called “unfair and exploitative trade practices.”
Bangladesh, the second-largest garment exporter in the world, has long benefited from duty-free access to U.S. markets under various preferential trade agreements. Trump’s move effectively cancels that advantage, sending shockwaves through Dhaka’s export-dependent economy.
🇮🇳 India Steps into the Gap
For India, this disruption presents a golden window. While Bangladesh has held a pricing advantage for years — primarily due to lower labor costs and trade concessions — Indian manufacturers boast stronger vertical integration, larger capacity, and better infrastructure.
Several U.S.-based importers and fashion brands have already begun reaching out to Indian suppliers in cities like Tiruppur, Surat, and Ludhiana. According to a report by the Confederation of Indian Textile Industry (CITI), enquiries from U.S. buyers have surged by 28% in the past 48 hours.
📈 Stock Market Reaction
Here’s how some of the leading Indian textile firms performed post-announcement:
Vardhman Textiles Ltd: Up 9.4%
KPR Mill Ltd: Up 7.2%
Arvind Ltd: Up 6.8%
Welspun India: Up 11.3%
Raymond Ltd: Up 5.5%
The BSE Textile Index rose over 6%, outperforming the Sensex and Nifty 50, as investors bet on rising order books and export margins.
📊 Why India Is Poised to Gain
There are several reasons why Indian textile firms stand to benefit immediately and in the medium term:
✅ Scale & Infrastructure
India’s textile industry is one of the largest globally, with integrated production facilities — from cotton farming to garment manufacturing — allowing quicker turnaround and supply consistency.
✅ Policy Tailwinds
The PLI (Production Linked Incentive) scheme for textiles, combined with increased export incentives, has already made Indian exports more competitive. Recent trade negotiations with the U.S. have also paved the way for smoother export protocols.
✅ Brand Trust
Many U.S. and European brands already have long-standing relationships with Indian manufacturers. Given the supply chain uncertainty in Bangladesh, they may prefer shifting to more stable and familiar partners.
🌐 Regional Geopolitical Impact
The tariff not only disrupts trade — it also introduces a new geopolitical fault line in South Asia. Bangladesh’s rapid export-driven growth has long been hailed as a development success story. A sudden reduction in garment exports to the U.S. could put millions of jobs at risk, especially among women in the ready-made garment (RMG) sector.
India, while benefitting economically, must tread carefully. As a regional leader, it may be expected to balance opportunism with diplomatic tact, possibly by promoting regional trade cooperation or offering strategic support.
🧵 Challenges for India
While the optimism is high, the Indian textile industry will need to address some key challenges to sustain momentum:
Labor Costs: India still faces higher labor costs than Bangladesh, which may affect pricing competitiveness in the long run.
Compliance Pressure: With U.S. importers increasingly focusing on ESG (Environmental, Social, Governance) criteria, Indian firms will need to improve traceability and ethical sourcing.
Logistics: Port congestion and inland freight inefficiencies could hamper timely deliveries if not addressed swiftly.
However, industry experts are confident that Indian firms — especially the well-capitalized mid- and large-scale ones — are prepared to scale quickly and capture new orders.
🧶 Looking Ahead: Can India Weave Long-Term Gains?
This unexpected development offers more than just a short-term rally. If Indian companies can lock in long-term contracts, upgrade manufacturing standards, and maintain global competitiveness, they could permanently secure a larger share of the $1.5 trillion global apparel market.
In many ways, this is a “China moment” for Indian textiles — a disruption in one country creating opportunity in another. The key difference lies in execution.
📌 Conclusion
The Trump-imposed 35% tariff on Bangladeshi textiles has thrown a curveball into global supply chains — but for Indian textile firms, it’s an opportunity waiting to be stitched into success. As share prices soar and order books swell, the coming months may determine whether this is a one-off spike or the beginning of India’s new textile renaissance.
