[color=hsl(0, 0%, 0%)]India’s textile industry, battered by historic US tariffs and a battered export trajectory, now teeters on the cusp of its most dramatic turnaround in over a decade. The soon to be signed India-US trade deal, which would slash present tariff rates from a suffocating 50 percent to a more manageable band near 14 percent, promises to fundamentally reshape the nation’s export landscape—and possibly fuel the sector’s most aggressive bull run in recent memory.
[color=hsl(0, 0%, 0%)]Tariff Havoc—and the Scale of the Crisis
[color=hsl(0, 0%, 0%)]Trump-era tariffs, peaking at 50 percent by October 2025, have precipitated a deep crisis: textile and apparel exports to the US—India’s largest market—plunged by 12.9 percent year-on-year in October, with industry insiders predicting an even grimmer fall to 15–20 percent in the following months. Factories from Tirupur to Surat have slashed output as major US buyers demanded discounts, cancelled shipments, or shifted orders elsewhere. The Apparel Export Promotion Council (AEPC) reports that fresh US-bound orders have largely dried up since August, as Indian suppliers have been forced to offer ruinous discounts just to cling to existing customers.
[color=hsl(0, 0%, 0%)]Nearly a quarter of all Indian textile exports faced immediate threat. The sector’s predicament was worsened by stagnant retail orders and a difficult European outlook, compounding the pressure on margins already thinned by tariff burdens.
[color=hsl(0, 0%, 0%)]The Trade Deal’s Resurgence Logic
[color=hsl(0, 0%, 0%)]The mooted India-US trade détente is expected to drive tariffs down to just 14 percent, compared to the current 50 percent wall—with US officials, including President Trump, signaling a “win-win” posture and Indian negotiators seeking a level playing field for their $11 billion US textile export market. If enacted, analysts and industry bodies forecast that it will restore price competitiveness, freeing India from the margin-killing discount cycle and reigniting demand from US buyers.
[color=hsl(0, 0%, 0%)]Crucially, the sector anticipates a rebound beginning just a few months after the agreement’s implementation. Industry experts, based on past behavior, anticipate a 20–25 percent recovery in US-bound exports for FY26—reversing the multi-quarter slide and positioning India to reclaim lost ground at the expense of rivals.
[color=hsl(0, 0%, 0%)]Himatsingka Seide and Gokaldas Exports: The Bullish Bellwethers
[color=hsl(0, 0%, 0%)]Two names—Himatsingka Seide and Gokaldas Exports—emerge as pivotal players in this recovery narrative. Himatsingka, which generates roughly 60 percent (recently reduced from 83 percent) of its revenues from the US, has suffered a revenue decline of about 9–10 percent in the latest quarters, as tariffs forced it to yield pricing power and accept lower margins. Its premium partnerships with iconic global brands (such as Calvin Klein, Tommy Hilfiger, Kate Spade New York, and Aeropostale for the US market) have buffered—though not fully protected—it from the latest shock. Even so, the company’s EBITDA margin fell by 400 basis points, and there have been notable declines in profitability and institutional participation.
[color=hsl(0, 0%, 0%)]If the tariff cut to 14 percent materializes, it could add 400–900 basis points to EBITDA margins for Himatsingka in the coming 18–24 months as price power and volumes recover. Analyst targets generally fall within the ₹190 to ₹210 region, implying 55–68 percent upside from current levels, and even outside bull-case targets by Kotak reach up to ₹290 if US bedding demand surges as projected—a rerate from the current “distressed” market stance. However, it’s worth noting the company’s high debt-to-EBITDA ratio (6.6x) and mixed technicals present real risks, requiring vigilance amid the optimism.
[color=hsl(0, 0%, 0%)]Gokaldas Exports, with more than 70 percent US exposure and 90 million garments produced annually, is another formidable beneficiary. Despite US headwinds, Gokaldas reported 7 percent YoY revenue growth in Q2 FY26 and maintained a robust India order book while actively diversifying into the UK, Europe, and Africa. Should the tariff rollback go through, Nomura projects 5–10 percent margin expansion, which, when combined with Gokaldas’ ongoing capacity growth, would likely accelerate earnings and stock performance further.
[color=hsl(0, 0%, 0%)]Bangladesh: The Perfect Storm for Indian Textiles
[color=hsl(0, 0%, 0%)]India’s changing fortunes are amplified by the crisis across the border. Bangladesh, India’s fiercest competitor in the low-cost apparel segment, is in crisis: since mid-2024, the garment sector has endured major political unrest, natural gas and electricity shortages, and production shutdowns. Daily blackouts of 3–4 hours have forced many factories into closure, while dozens of smaller units have been driven out permanently. Large retailers, citing “unreliable supply chains,” are now pivoting orders away from Bangladesh to India—a shift already estimated at 15–20 percent of displaced volume.
[color=hsl(0, 0%, 0%)]Adding a further tailwind, the new India-US trade agreement could erase Bangladesh’s advantage under its Generalized System of Preferences, delivering long-term parity for Indian exporters.
[color=hsl(0, 0%, 0%)]The Bull Run: Beyond the Obvious Winners
[color=hsl(0, 0%, 0%)]Momentum is not confined to just Himatsingka and Gokaldas. Other major US-facing players like Welspun Living (whose home textiles business is 65 percent dependent on the US) and KPR Mill (apparel, with 20 percent upside seen if tariffs ease) are poised for 15–25 percent gains as well. Further down the value chain, yarn specialists like Vardhman Textiles and diversified groups like Trident (towels, bedsheets) will see knock-on benefits if volumes lift sector-wide.
[color=hsl(0, 0%, 0%)]Cautions: Volatility, Policy, and Structural Risks
[color=hsl(0, 0%, 0%)]Despite the optimism, the sector’s rebound is not automatic. Watchpoints remain: global cotton price volatility, sudden US policy changes, and India’s own infrastructure and power costs could hamstring the recovery if left unaddressed. Still, with Bangladesh hamstrung and the world’s largest retail market once again open, India’s textiles sector faces a genuine “phoenix moment”—one won not by luck, but by outlasting global turbulence, executing reforms, and leveraging newly won tariff parity.
[color=hsl(0, 0%, 0%)]A Sector Flips from Victim to Victor
[color=hsl(0, 0%, 0%)]India’s textile story, long marred by protectionism and global shocks, is now poised to lead the country’s export renaissance, provided policy reform, price stability, and infrastructure support remain on track. If the India-US trade deal is cemented, expect the sector’s narrative to decisively shift—from that of a battered victim, to an aggressive victor recapturing global share, one lowered tariff at a time. |
