How the India-USA Tariff War Is Impacting Handblock Cotton Exports?

The 2025 trade dispute between India and the USA has rattled the textile industry—especially for handblock-printed cotton exports. The sudden imposition of a steep 50% US tariff on Indian goods, announced as a penalty for India’s purchases of Russian oil, is reshaping global cotton trade and threatening the livelihood of thousands of artisans.

What Changed?

  • The US tariff doubled to 50% on Indian textile products, compared to 20% for Bangladesh, 30% for China, and 46% for Vietnam.

  • In response, India suspended its 11% cotton import duty until September 30, 2025, to lower production costs for its garment and textile sector.

  • India is the world’s largest cotton producer and a top exporter of block-printed fabrics. The US accounts for nearly 20% of India’s total exports, making this a critical market.

How Are Handblock Cotton Exporters Affected?

  • Reduced Export Volumes: US buyers are putting orders on hold or shifting to suppliers in other countries with lower tariffs, causing a sharp decline in exports of handblock-printed cotton.

  • Falling Yarn Purchases: Purchase of cotton yarn, essential for handblock printing, has dipped by 50% since the US tariff hike. This, in turn, affects both weavers and handblock printers, especially SMEs in states like Rajasthan, Tamil Nadu, and Gujarat.

  • Price & Profit Pressure: To stay competitive, Indian exporters may need to absorb tariff costs or pass them on as higher prices, risking further loss of business and narrowing profit margins.

  • Threat to Artisan Jobs: SMEs and artisan groups—key to the handblock segment—face rising financial stress, potential layoffs, and even plant shutdowns as export demand dries up.

  • Shift in Sourcing: US buyers may shift to textiles from Bangladesh or Vietnam, which currently face lower tariffs, further squeezing Indian exporters’ US market share.

Government and Industry Response

  • The temporary cotton import duty waiver aims to relieve production cost pressures, though its benefits may be short-lived if high US tariffs persist beyond September.

  • There are industry calls for the government to negotiate a longer-term solution with the US, possibly through trade concessions or by lowering duties on US cotton imports to sweeten deals.

What’s Next?

India aims to boost its textile exports to $100 billion by 2030, but the US tariff hike creates major headwinds for artisan-driven products like handblock cotton. Without swift trade solutions, India risks losing its competitive edge in this traditional sector, putting both cultural heritage and rural jobs at risk.

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