Dear Friends,

April 2025 began with a major disruption in global trade as U.S. President Donald Trump introduced sweeping tariffs on imported goods. This policy shift, aimed at addressing trade imbalances, has alarmed economists and businesses worldwide. The reciprocal tariffs threaten to overturn decades of established trade practices, potentially triggering chaos for global supply chains.

Impact of U.S. Reciprocal Tariffs

President Trump’s tariff policy marks a significant change in U.S. trade strategy. For India, apparel imports to the U.S. will now face an average tariff of 38.5%, up from approximately 12%, representing a dramatic increase of 26 percentage points. Although this rate is slightly lower compared to other nations like China and Bangladesh, it poses substantial challenges for Indian exporters.

The repercussions include: higher import costs for U.S. retailers, leading to price hikes for consumers; pressure on U.S. importers to explore tariff-exempt regions or adopt nearshoring strategies; and potential shifts towards domestic production in certain industries.

As can be seen, the recent hikes in the U.S. import tariffs represents a substantial policy shift with far-reaching implications for global trade. These changes are poised to reshape sourcing strategies, cost structures, and trade dynamics, particularly impacting Asian suppliers including India who have long been central to the U.S. textile and apparel imports.

India's Response and Bilateral Trade Agreement (BTA)

The Ministry of Commerce and Industry in India is carefully evaluating the implications of these tariffs while exploring opportunities arising from this policy shift. Recent discussions between Indian and U.S. trade teams have focused on expediting a multi-sectoral Bilateral Trade Agreement (BTA). The Council has been actively consulting with key stakeholders such as the Ministry of Textiles, Ministry of Commerce, Invest India, CII, and CITI to align strategies and mitigate the impact.

In light of these developments, India's industry must adapt boldly and confidently to navigate the evolving global trade landscape while striving for self-reliance and resilience in business dealings.

Meeting with Ministry Officials

On 6th of March, 2025, I, along with the Council’s Executive Director, had the privilege of meeting the Hon’ble Union Textiles Minister Shri Giriraj Singh and Ms. Shubhra, Trade Advisor, at their offices in New Delhi. The discussion focused on addressing the challenges faced by exporters in the Cotton Textiles Sector.

On 13th of March, 2025, the Hon’ble Commerce and Industry Minister, Shri Piyush Goyal held a virtual interaction with Export Promotion Councils (EPCs). TEXPROCIL Vice Chairman, Shri Ravi Sam along with the Council’s Executive Director attended this meeting in person and raised critical issues impacting the Cotton Textiles Industry.

Meeting with the RoSCTL Committee

A stakeholder consultation was convened on 6th March, 2025 at Vanijya Bhawan, New Delhi. During this meeting with Shri G.K. Pillai, Chairman of the RoSCTL Committee, discussions revolved around the RoSCTL data format and updating the recommended ceiling rates under the scheme for DTA/AA/EOU/SEZ exports. The Committee requested industry stakeholders to submit RoSCTL data for FY 2023-24 by March 31, 2025. It was emphasized that data from key exporters representing a major share of exports under HS codes in Chapters 61/62/63 should be submitted to expedite rate calculations. The Committee clarified that rate calculations are based strictly on submitted data and actuals under the remission scheme, not on subsidy requests.

As a follow-up, the Council convened a series of meetings with relevant members to discuss RoSCTL data submission for FY 2023-24 for Made-up products under Chapter 63. In this regard, we urge all our members to expedite their submissions by 15th April, 2025 to facilitate timely calculations by the RoSCTL Committee.

Annual RODTEP Return (ARR)

We are indeed grateful to the DGFT for granting a three months extension (up to 30th June, 2025) to the industry for filing the Annual RODTEP Return (ARR) for FY 2023-24. Further, to explain the process of filling the ARR form, the Council organised an informative webinar on 17th March, 2025, with BBSR & Associates LLP (affiliate of KPMG).

Our heartiest gratitude to Mr. Sunil Patwari, Immediate Past Chairman - TEXPROCIL & MD - Nagreeka Exports Ltd; Mr. Dharmendra Goyal, MD - Shreedhar Cotsyn Pvt Ltd; and Mr. Nitin Goyal, Sr. Vice President, Group Indirect Tax Head - Welspun Group, for their valuable guidance in organising this webinar and for releasing a ‘Study-cum-Reference Guide on ARR’ for the benefit of the industry. The webinar provided members with a comprehensive understanding of the ARR guidelines, including key compliance aspects and the possible methodology that may be used for accurate filing.

Way Forward

Friends, the global tariff landscape presents challenges and opportunities for countries worldwide, including India. While the recent tariff hikes have disrupted international trade, experts believe these disruptions could open doors for certain sectors. With a $10.8 billion share of the U.S. imports in 2024, it is imperative to sustain the share of Indian textiles and clothing in this traditional market.

Furthermore, even though the new reciprocal tariffs for India are lower than competing countries like China, Bangladesh, Vietnam etc., it is higher in comparison to EU, Turkey and Egypt which are at 10%. To maintain its global leadership, therefore, a balanced and fair trade environment will be crucial for sustained growth.

The Government’s recent announcement of "Export Promotion Mission," backed by a budget of ₹2,250 crore, aims to boost exports by improving export credit access, cross-border factoring, market access initiatives, and operationalizing the interest equalization scheme. Timely implementation of this initiative can help to position India favourably in the global market.

Finally, to capitalize on these developments, India must focus on building domestic industrial resilience and enhancing efficiency in its textile sector. This strategic approach will help India strengthen its competitive edge in international trade amidst evolving global challenges.

:: TEXPROCIL ::