Indian Textile Stocks Drop as US Cuts Tariffs on Bangladesh Imports

Quick summary

• Indian textile companies like Kitex, Pearl Global, and KPR Mill witnessed stock drops of up to 7% following the U.S. decision to reduce import duties on Bangladesh’s goods from 35% to 20%, diminishing India’s cost advantage.
• the reduced tariff aligns Bangladesh’s duty rate with vietnam’s, while Indian textile exports continue to face a higher tariff of 25%.
• Major exporters such as Welspun Living, Gokaldas Exports, and Indo Count Industries derive 40%-70% of their revenue from the U.S., making them vulnerable due to shrinking margins and increased global competition.
• Specific declines include Pearl Global (down by 7.2%), Kitex Garments (5%), KPR Mill (4.3%), Gokaldas Exports (3.1%), Arvind Ltd (1.8%), and Trident falling between 1%-2.5%.
• The slide in stocks extended losses that began earlier in the week; firms impacted heavily are those reliant on mass-market garment supply chains dominated by rivals like Bangladesh and Vietnam.

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!Indian textile stocks slide up to 7% after Trump slashes tariffs on rival supplier Bangladesh
Caption: Trump tariff cut for Bangladesh hits Indian textile stocks; margin pressures mount.

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Indian opinion Analysis

The U.S.’s reduction in import duties for Bangladeshi textiles signals intensified competition for India’s export market share in mass-market garments-segments vital for mid-sized firms with substantial exposure to American buyers. For key players generating up to two-thirds of their revenues from the U.S., this development heightens pressure on already narrow operating margins.

India’s comparatively higher tariffs will likely exacerbate its competitive disadvantage against nations like Vietnam and Bangladesh known for cost efficiency in manufacturing apparel at scale. As global trade agreements now align strategic rivals’ advantages more closely with consumer demands abroad,India may need focused policy efforts-such as sector-specific relief or renegotiating favorable trade terms-to counter financial strain experienced by businesses heavily reliant on exports.Continued erosion of profitability could ripple through employment-heavy sectors linked directly with textiles production clusters across India-a critical aspect given their role in both industrial GDP contribution and job creation downstream.