After Tariffs, Textile and Clothing Exporters Witness 50% Drop in US Business: Report

New Delhi: Following the imposition of 50% tariffs by US president Donald Trump on Indian goods, the country’s textile and clothing exporters have witnessed an equivalent 50% drop in their US business with inventories piling up and orders getting delayed, an industry-wide survey has revealed.

The Confederation of Indian Textile Industry (CITI) has said that around one-third of the respondents in the survey have said that turnover of their US business has decreased by more than 50%. For around 85% of these respondents, the reduction in orders has resulted in inventory build-up, reported Financial Express.

Around two-third of the respondents also revealed that they had to offer discounts up to 25% to remain competitive.

Around 82% of the exporters also have to deal with an extended credit cycle across the supply chain owing to the tariffs.

“Among them, over half indicated that the credit period has increased by 3 to 6 months, reflecting a substantial strain on liquidity,” said CITI in a statement.

The survey also indicates that around 40% of respondents saw a rise in working capital requirements by more than 30%, which reflects the increasing financial burden within the sector.

Accounting for 28% of the total exports, the US is the single-biggest market for India’s textile and apparel, with total exports by the sector in last financial year amounting to at $ 11 billion.

The respondents of the survey have also asked for a moratorium on repayment of loans and collateral-free loans to reduce the stress. The CITI has also sought support for export diversification and market development initiatives including increasing the rates of tax refund under the Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) schemes.

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