In a move that has impacted India's textile market, US President Donald Trump signed an executive order yesterday, imposing new tariffs on goods imported from various countries.
The order lowers the reciprocal tariff on Bangladeshi goods from 35% to 20%, while imposing a 25% tariff on Indian goods. These changes will take effect on August 7.
Following the announcement, shares in India's apparel market fell on Friday, according to a report by News18 English.
Bangladesh is a major exporter of ready-made garments to the US. India has long been trying to capture a larger share of this market, but Bangladesh has had an advantage due to its technology and low-cost labor.
However, when Trump imposed a 35% tariff on Bangladesh last month, India gained a competitive edge, and its apparel market saw an increase in share prices. The latest tariff announcement has reversed this trend.
Immediately after the US announced the tariff reduction for Bangladesh, several Indian companies saw their share prices drop.
KPR Mill's shares fell by 5%, Welspun Living by 2%, Alok Industries by 0.8%, Pearl Global by 3.7%, Gokuldas Exports by 2.6%, Kitex Garments by 3.21%, and Vardhman Textiles by 2.8%.
In a separate development, the US has also entered into a trade agreement with Pakistan, imposing a 19% tariff on its goods, a reduction from the 29% tariff applied in April.
Additionally, the US has agreed to a joint oil exploration deal with Pakistan.
The 25% tariff on Indian goods has caused concern among Indian exporters, particularly in labor-intensive sectors like textiles and high-value electronics.
These sectors are now at risk of losing their competitive pricing in the US, India's largest export destination.
