Textile stocks slide as US cuts tariffs on Bangladeshi imports

Shares of Indian textile companies fell sharply on Friday, August 1, after US President Donald Trump announced a surprise reduction in import tariffs on goods from Bangladesh — a key rival to Indian exporters in the garments sector.

The US slashed tariffs on Bangladeshi imports from 35% to 20%, thereby improving the country's competitiveness in the American market. Bangladesh is already a major exporter of ready-made garments (RMG) and this move is expected to intensify pressure on Indian textile manufacturers.

Following the announcement, several Indian textile stocks saw notable declines with shares of KPR Mills falling 5%, Welspun Living dropped 2%, Alok Industries slipped 0.8%, Pearl Global declined 3.7%, Gokaldas Exports dropped 2.6%,Kitex Garments fell 3.21% and Vardhman Textiles slid 2.8%.

In another development, Pakistan, which reached a new trade agreement with the US on Thursday, will now face a lower tariff of 19%, down from the previous 29% imposed in April. President Trump stated that the US and Pakistan plan to cooperate on oil exploration projects, despite previous failed attempts by Pakistan to tap into its reserves.

The newly released tariff schedule revealed that the US has imposed lower import duties on over 50 countries, including key competitors like Bangladesh, Pakistan, Vietnam (20%), and several ASEAN nations such as Malaysia, Indonesia, and the Philippines (all at 19%). In contrast, India continues to face a 25% tariff.

The differential treatment is raising concerns among Indian exporters, particularly in labour-intensive sectors such as textiles and high-value electronics, which could lose price competitiveness in the US market — India's largest export destination.

Analysts say that unless India secures more favourable trade terms, its exporters may struggle to maintain their market share amid growing competition from lower-tariff nations.