Indian Garment Industry Faces US Tariff Risk as CITI Seeks Talks

30 September 2026: India’s garment industry faces renewed US tariff uncertainty after the Confederation of Indian Textile Industry (CITI), in a statement issued in New Delhi on 19 September 2026, warned of risks from new US sanctions legislation. Its appeal for government intervention concerns exporters’ competitiveness, particularly smaller firms’ ability to absorb additional costs.

What CITI’s warning means for the Indian garment industry

In its official statement, CITI linked its concerns to the signing of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026. Chairman Ashwin Chandran urged India to engage Washington and seek a fair bilateral trade agreement.

CITI described the United States as the sector’s largest single market and cautioned that other trade agreements would take time to deliver gains. Market diversification, in its assessment, cannot simply replace US business.

Apparel exports fall despite textile growth

CITI reported that India’s textile exports rose 6.94% in US dollar terms during April-August 2026, while apparel exports fell 9.10%. Combined textile and apparel exports declined 0.24% year on year. These figures describe different categories, not contradictory measures of the same export basket. The combined decline also gives a more useful picture than the textile growth figure alone. 

New markets need preparation, not assumptions

New Zealand offers a dated market-access development. Its Ministry of Foreign Affairs and Trade confirms that both countries have ratified their free-trade agreement, with entry into force scheduled for 20 October 2026. As of 29 September, it is not yet in force.

Screen Print India’s coverage of the India–New Zealand textile agreement explains the sector’s interest in that market. Exporters considering it should check product-level tariff treatment and origin requirements before quoting preferential prices.

The EU, UK, Australia, Japan and Canada also merit buyer-by-buyer assessment. A practical diversification plan should compare achievable margins, compliance costs, payment terms and repeat-order potential, rather than count the number of countries approached.

Factory improvements should follow the order book

For manufacturers, the immediate task is to identify avoidable costs. Review cutting waste and rework alongside machine downtime and delivery reliability before committing to automation. Digital production planning, energy-efficiency measures and quality controls should address measured factory problems.

Earlier coverage of FTAs and apparel modernisation provides context for this discussion. Technology investment should support a defined production need, not become a substitute for securing customers.

Higher-value products require specific capabilities

Performance apparel, recycled-fibre garments and specialised products deserve consideration where buyers specify a need and factories can meet it. Technical textiles require their own specifications; they are not an automatic next step for every garment unit.

Tiruppur’s export diversification plans illustrate the industry’s interest in manmade fibres and performance wear. Product development should follow buyer specifications, with credible testing and evidence behind environmental claims.

Trade engagement remains important, but exporters can act now by reviewing customer concentration and testing smaller product or market expansions before committing substantial capital.