Shares of Indian textile companies including Gokaldas Exports, KPR Mill, Vardhman Textiles, and Arvind Ltd zoomed up to 8.2 per cent in intraday trade on Tuesday, July 8, after the US administration, under President Donald Trump, announced a 35 per cent tariff on Bangladesh, with specific implications for the apparel and textile sector.
The shares of Gokaldas Exports surged 8.2 per cent on Tuesday, reaching a high of Rs 974.70, and leading the gains among textile stocks. Vardhman Textiles shares followed closely, rising 7.9 per cent to touch Rs 537.70. KPR Mill shares climbed 4 per cent to reach Rs 1,204.85 during the session, while the shares of Arvind Ltd gained 2.9 per cent , hitting an intraday high of Rs 356.35.
The newly announced tariff, which takes effect from August 1, is a slight drop from the 37 per cent rate that had been proposed earlier in April. However, it still stands significantly above the standard 10 per cent tariff baseline and is expected to impact Bangladesh’s competitiveness in the global garment supply chain.
While the US has left the door open for negotiations in the weeks leading up to the implementation, the announcement has already prompted a reassessment of sourcing strategies among American buyers.
The tariff escalation comes on the heels of a recent trade agreement signed between the US and Vietnam, which imposes a 20 per cent tariff on direct Vietnamese exports and a steeper 40 per cent duty on transshipped goods—exports routed through Vietnam but originating in other countries to bypass tariff walls.
Currently, India faces a 10 per cent tariff on textile exports to the US, but due to product classifications and differential rates, some segments experience tariffs as high as 26 per cent . The shift in tariff dynamics is expected to realign competitive advantages, especially if further negotiations tilt in India’s favor.
Industry is likely to closely track the developments around a potential trade agreement between India and the US, especially after the return of an Indian delegation from Washington last week. Any easing of tariff burdens on Indian textile exports during such a deal could help improve India’s price competitiveness and expand its market share in the US.
However, it should be noted that if tariff levels remain unchanged for Indian goods while others are adjusted downward, especially for Vietnam, India’s advantage in the export market may narrow.
