The Indian textile industry is facing a significant challenge following the US's decision to impose a 50% tariff on certain Indian goods, particularly home textiles like bedsheets and towels. This move, stemming from renewed trade tensions, is expected to severely impact the sector's financial health.

Leading credit rating agency CRISIL recently released a report indicating that Indian textile companies are preparing for a possible 5–10% decline in revenue. About three-quarters of the textile industry's exports are headed for the US market, making them especially vulnerable to this new tax, according to the report, which examined about 40 textile companies.

The ripple effects of this tariff are already being felt on the ground. Production in major textile hubs such as Tirupur, Noida, and Surat has either been reduced or completely halted. This slowdown puts thousands of jobs in the sector at risk, raising concerns about the livelihood of a massive workforce.

However, industry experts believe there are ways to mitigate the damage. Companies had already begun front-loading their sales in anticipation of the tariff, which may soften the immediate blow. Additionally, competitors like China and Pakistan have limited production capacity, which could help India retain its market share in the US despite the new tax. Indian exporters are also actively exploring and expanding into new markets, such as the European Union and the United Kingdom, to diversify their customer base and reduce dependency on the US market.

Overall, while the new US tariff presents a considerable challenge, the Indian textile industry is working to adapt and find new avenues for growth to ensure its long-term resilience.