India gets a lower US tariff; here's why textile exporters are still worried
India's textile exporters face a competitive disadvantage in the US market despite lower headline tariffs compared to rivals like China. While India's 10% tariff is lower than many competitors, the lack of tariff-rate quota exemptions granted to countries like Bangladesh and Indonesia threatens to erode India's market share.
Why it matters
This highlights how non-tariff trade barriers and specific quota exemptions can significantly impact the global competitiveness of major manufacturing economies.
A 10% US tariff sounds like a win for India's textile exporters, but there's a catch.India's textile and apparel sector could still come under pressure in the US market, even though the country has escaped the steeper tariffs imposed on several competing exporters. Although the country faces a lighter Section 301 tariff than several competing countries, the absence of tariff-rate quota exemptions, granted to rivals such as Bangladesh, Cambodia, Indonesia and Malaysia, could blunt that advantage and weaken India's competitiveness in the US market, according to an Emkay Research report.While India has been placed under a 10% Section 301 tariff, lower than the 12.5% rate applicable to countries including China, Vietnam, Brazil and Thailand, the report said that exporters from Bangladesh, Cambodia, Indonesia and Malaysia have secured TRQ exemptions that Indian exporters have missed out on.The brokerage said these exemptions cover specified quantities of textile and apparel imports manufactured using…
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