Shares of the textile industry fell today after US President Donald Trump signed an executive order increasing tariffs on Indian exports from 25% to 50%.

The first 25% raise goes into effect tonight (Eastern Time), with the remaining 25% to follow in 21 days. The decision has sparked worries about export competitiveness and the potential impact on industry profitability.

Textile stocks have fallen in the previous week following Donald Trump’s declaration of a 25% tax on Indian exports. This decision has resulted in investors selling, particularly in companies that rely substantially on the US market.

India’s garment and clothing sector is expected to grow by 9-11% in FY26, following a 12-14% gain in FY25. The entire market size is anticipated to be $190 billion by 2025-26. Apparel exports are a crucial driver, up 8.91% to $4.19 billion in the first quarter of FY26.

Gokaldas Exports and Indo Count Industries get over 70% of their revenue from the United States, while Welspun Living and Pearl Global get about 65% and 50%, respectively, making them more sensitive to trade-related uncertainty and tariff consequences.

Furthermore, the increased tariff widens the gap between India and other competing countries in the textile market, including Bangladesh, Vietnam, and Pakistan.

Bangladesh’s tariff rate was recently reduced from 35% to 20%, while Pakistan, which recently announced a deal with the US, would pay a 19% price, down from 29% previously. Vietnam recently reached an agreement with the United States to impose a 20% tax.

Furthermore, the higher tax on Indian textiles widens the competitive gap against significant rivals such as Bangladesh, Vietnam, and Pakistan. While India suffers a 50% price, Bangladesh’s rate has been dropped from 35% to 20%, and Pakistan now pays 19%, down from 29%, following a recent US accord. Vietnam also reached an agreement, agreeing to a 20% tariff. These reductions provide competing nations a pricing advantage over Indian exporters in the critical US market.

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