Indian textile stocks slipped after the US confirmed a fresh 10% tariff on India, with no exemption carved out for its textile exports.

The tariff came into effect the same day under Section 301 of the US Trade Act, a law that lets Washington penalise countries it says are not doing enough to stop imports made with forced labour.

India was one of 17 countries placed in this bracket, alongside the UK, Canada, Bangladesh, Indonesia and Mexico. It could have been worse. Back in March, the US had floated a steeper 12.5% tariff on India.

That percentage dropped to 10% following discussions on labor standards between Washington and India, as well as a measure just weeks previously by India’s own trade authorities to outlaw imports of products manufactured with forced labor.

The bigger blow for India’s textile industry is what it missed out on. The US has also set up special import quotas letting Bangladesh, Cambodia, Indonesia and Malaysia bring in textiles and apparel made with American cotton without paying the new tariff, for the next three years.

India got no such quota, which puts its exporters at a real disadvantage against Bangladesh in particular, a country that competes directly with India in the same markets.

The numbers show how much is riding on this. Indian exports in the affected textile and apparel categories totalled 9.9 billion dollars in 2025 and another 4.9 billion dollars between January and May this year, according to trade data.

This is not the first tariff hit either. Since February, when the US Supreme Court struck down an earlier and much steeper set of tariffs, Indian exporters have already been paying a 10% duty on these goods.

Before that, between August last year and February, most manufactured goods including textiles faced tariffs as high as 50% on top of standard rates.

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