India’s Textile and Apparel sector witnessed a setback in August 2025, with exports slipping 2.73% year-on-year to 2,931.39 million dollars, compared with 3,013.76 million dollars in the same month last year, according to data shared by the Confederation of Indian textile industry (CITI). The decline reflects the mounting strain of steep US tariffs, which stand at nearly 60% and continue to weigh heavily on India’s largest export market.

Key categories such as jute manufactures and carpets registered sharp declines of 8.35% and 7.22%, while carpet exports to the US fell from 128.48 million dollars to 119.21 million dollars. Cotton yarn and handloom products also saw a marginal dip, contracting to 985.18 million dollars in August 2025.

Despite this setback, the broader picture from April to August 2025 shows cumulative exports rising 2.52% year-on-year, with apparel exports alone growing 5.78%. At the same time, imports of cotton surged sharply, climbing 21.32% in August and nearly 49% in the five-month period.

Industry experts caution that prolonged tariffs could deepen challenges for small and mid-sized exporters. “Large players may withstand the pressure due to stronger cash reserves, but smaller firms will feel the real heat,” said Rohit Sadaka, Director at India Ratings.

ICRA recently revised its outlook on Indian apparel exports to negative, predicting a revenue fall of 6–9% in FY26 and narrowing profit margins to around 7.5%. Analysts highlight that while diversification to Europe and the UK may help, a meaningful shift will take time, leaving the industry braced for a testing phase ahead.