India will get tremendous benefit from higher tariff on China, demand for Indian products will increase in US

In May this year, Indian merchandise exports would have decreased by 2.17% from the year-ago last month. However, this time, clothing exports increased by 11.35% compared to last month of May 2024. Garment exports increased for the second time in the current financial year 2025-26.

As well as April-May 2025, the rise has been 12.80%. Garment export businesses regard the prime explanation for the same as the higher tariff on Chinese clothing in the US market compared to India, along with the prevailing domestic instability in Bangladesh. Garments are regarded as an employment-based sector, and hence, a rise in the export of garments would enhance employment as well. India has stiff competition from China and Bangladesh in the global garment market.

Garment exports from India have got a boost since the internal issues in Bangladesh started in August last year. This is due to the fact that importers from the developed nations are opting to import products from Indian export houses rather than those from Bangladesh, and are even encouraging them to increase their production base. These days, the tariff level on Chinese products in the US market is higher than on Indian and this has raised the sales demand for Indian products in the market.

The US imports garments worth $120 billion annually. China's share in this is $30 billion, while India's is a little less than $10 billion. Due to the difference in duty, India has a great opportunity to increase its share in the US market. However, Sanjay Jain, former chairman of the Confederation of Indian Textile Industries, says that the increase in apparel exports will depend on how cheap we can get raw materials.

This opportunity to increase exports can be capitalized only by the inexpensive supply of raw material at cheap rates. The supply of cheap man-made fiber is one of the biggest problems. If an enhanced minimum support price of cotton in the next season has been declared, the prices of cotton are sure to increase.

This will add to the price of clothing made from cotton. Availability of man-made fiber on a large scale at inexpensive rates is also an issue for garment producers. Wherein, small export houses also complain that the orders for Bangladesh and China are now reaching India, but the large enterprises linked to clothing export are deriving the advantage of the same. Small entrepreneurs are getting fewer orders from America.