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As Indian prime minister Narendra Modi hosted U.S. vice president JD Vance for dinner at his residence Monday evening, the local industry has was abuzz with what this visit could mean for bilateral relations, even as tensions from the tariffs announced earlier this month have been running high.
The announcements on tariffs for India at 26 percent have been relatively lower compared to others in the region, as neighboring countries like Bangladesh have been faced with 37 percent, Sri Lanka 44 percent, Vietnam 46 percent, Cambodia at 49 percent.
Industry analysts said that the timing of the visit—largely being touted as a personal visit—is a sign of optimism for the bilateral trade deal in which both countries are targeting an increase from the present $191 billion to $500 billion by 2030 in reciprocal trade.
“The visit will provide an opportunity for both sides to review the progress in bilateral relations and the implementation of the outcomes of the India-U.S. Joint Statement issued in February during the visit of the Prime Minister to the US. The two sides will also exchange views on regional and global developments of mutual interest,” the ministry of external affairs said in a statement.
The cryptic statement from the Indian foreign ministry about an “exchange of views on regional and global developments of mutual interest,” regarding the Vance visit is being viewed with hope by the apparel and textile industry which has been looking closely at the need for quick action.
Vice president Vance was welcomed to India with a ceremonial guard of honor on Monday. He was accompanied by his India-born wife, Usha, and three children who were dressed in Indian outfits, while the second lady was dressed in red, in a design by Saloni, a label created by Indian and London-based fashion designer Saloni Lodha.
“Our hopes are very clear that that no differential tariffs should be imposed on India for our industry,” Sanjay K Jain, chairman, Indian Chamber of Commerce (ICC) told Sourcing Journal, as the industry has been quickly looking at how India can best move ahead in the present scenario.
“At best the U.S. can ask for duty free on U.S. cotton into India and for that give us concessions on garments being exported to the U.S. Apart from that we just want that there is no differential duty imposed on the 10 percent. There should be no other extra duty implemented on us,” he said.
Jain pointed out that for the Indian industry to capitalize on the present situation where tariffs are less than other countries, the issue of protectionism for raw materials needed to be addressed urgently. “As of today, cotton, polyester and viscose are more expensive than the competitors in Vietnam, Bangladesh, Pakistan and other countries.”
“If this is not done, another missed opportunity will happen,” he warned.
The industry has been hopeful for continued growth. Rresults of the 2024-2025 financial year ending March 31 came in with apparel exports up 10 percent over the previous year at $15.98 billion, and textile exports up 3.61 percent in the same time at $20.61 billion.
The textile and apparel industry accounts for 12 percent of India’s exports and contributes 2.3 percent to the gross domestic product.
Sudhir Sekhri, chairman Apparel Export Promotion Council (AEPC) said that the situation for the industry was changing quickly. “U.S. exporters have already started asking for discounts and cancellations,” he said.
Despite the lower tariffs for the region, he noted that the global competitiveness would be a factor as well, taking into considerations other regions, including Turkey which has been subjected to 10 percent only and other countries like Egypt and the Dominican Republic with the same. The fact of the neighboring countries being higher could not be the only consideration for India.
“It is very difficult to predict what will happen in the next three to six months,” he said.
A high-level Indian delegation is also expected to visit Washington this week for a three-day round of talks, starting Wednesday.
“India is committed to closing negotiations quickly and will follow the path of trade liberalization with the U.S.,” Sunil Barthwal, commerce secretary has commented.
The Vance visit appears to signal a warming up for India relations, analysts said, as the four-day itinerary includes stopping to visit the iconic Taj Mahal in Agra and a visit to Jaipur.
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