Vardhman Textiles, Trident, Gokaldas Exports, Indo Count Industries, Pearl Global, Welspun Living, and KPR Mill were among textile stocks that saw gains on Tuesday that saw their share values jump up to 6% in intraday trading on Tuesday, September 16, as optimism grew that India and the US could take steps toward finalizing a trade deal.
Chief negotiators from both countries are set to meet today in New Delhi to resume trade negotiations, which had been affected after the White House imposed an additional 25% tariff on Indian imports over continued purchases of Russian oil.
India and the US have been negotiating a bilateral trade agreement since March. So far, five rounds of negotiations have been completed. The sixth round, which was scheduled last month, was postponed following the imposition of 50% tariffs on Indian goods by the US.
The hopes of a trade deal between India and the US have resumed after US President Donald Trump wrote on Truth Social last week that both countries are continuing with their trade talks and that he looks forward to speaking with his “good friend,” PM Narendra Modi.
Prime Minister Narendra Modi responded that India and the US are natural partners and that teams from both sides are working to conclude negotiations on a bilateral trade deal.
Meanwhile, India’s Commerce Secretary, Sunil Barthwal, on Monday mentioned that both nations are in a “positive frame of mind” regarding the trade issue.
“There are some other issues, which are not directly related to trade, which I would not like to speak about. Those will also be taken up at a diplomatic level,” Barthwal said on Monday.
US is a large market for Indian textiles
Textile stocks were the biggest laggards following the US imposition of 50% tariffs, and various reports also suggested that the sector could face a severe hit if the tariffs remain in place for longer. The pause in trade negotiations has also kept these stocks under strain.
In 2024, India accounted for around 6% of the United States’ total apparel imports, translating to exports worth approximately $4.8 billion out of the US’s $80 billion import bill, and contributing to 33% of India’s overall apparel exports, according to the latest available data.
Additionally, India exported $5.2 billion worth of textiles to the US, bringing the combined apparel and textile exports to around $10 billion. The sector is also the second-largest employer in India, providing direct employment to over 45 million people and contributing approximately 2% to national GDP and 12% to total exports.
What to expect?
Officials see today’s talks as a possible opening to rescue a free trade agreement that had been thrown into doubt by the tariffs, which kicked in on August 27.
US Trade Representative for South Asia Brendan Lynch will lead the American side during the day-long negotiations, news agency Reuters reported. Senior Commerce Ministry official Rajesh Agarwal will represent India during the meeting, the agency said.
Lynch oversees the development and implementation of US trade policy with regard to 15 countries in the region, including management of the US-India Trade Policy Forum (TPF) as well as coordination of activity under Trade and Investment Framework Agreements (TIFAs) with regional partners.
“We have indicated that in the past. Also, the discussions are going on, the chief negotiator of the US is visiting India tonight and tomorrow will be holding talks to see what the picture can be. It is not the sixth round of negotiations, but it is definitely discussions on the trade talks and trying to see how we can reach an agreement between India and the US,” Agarwal, India’s chief negotiator, said on Monday.
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