Trump Tariff Impact: Indian Textile Exporters Balance Trade Risks Against UK FTA Gains

India’s top textile exporters face a mixed global outlook as the India–UK Free Trade Agreement (FTA) opens a duty-free route to the British market while tariff uncertainty clouds prospects in the United States, their largest export destination.

The US remains a key revenue source. Welspun Living earns about 65% of its revenue from the market, Gokaldas Exports around 33%, and Arvind Ltd. about 35%. But reciprocal tariff tensions between the two countries are affecting sentiment among exporters and buyers.

Welspun Living reported weaker consumer demand based on recent US retail data and said uncertainty over trade flows has dampened retailer sentiment.

Gokaldas Exports said its US operations remain unaffected in the short term, supported by a strong order book and established customer relationships. However, the company noted that tariff-related pressure on margins could shift its focus towards Europe. Management said the US share could range between 65% and 70% by year-end, depending on developments.

Arvind Ltd. expects the uncertainty to last at least another quarter. The company is absorbing additional costs, including air freight, to maintain relationships in the US.

The India–UK FTA removes the 12% tariff on home textiles, placing Indian exporters on equal footing with Bangladesh and giving them an edge over Chinese suppliers.

Welspun Living has received positive initial feedback from UK customers and sees growth potential in the market. Gokaldas Exports has increased its European revenue share from 9% in FY25 to 13.4% in Q1 FY26, supported by strong UK demand.

Arvind Limited expects its current UK business of Rs 200 crore to double in the coming years, although it estimates that the full benefits may take up to a year to materialise.

The contrasting trends are prompting exporters to diversify. Non-US markets now contribute 40% of Welspun Living’s revenue. Gokaldas Exports is increasing its presence in Europe and the UK, while Arvind is expanding in the UK to offset US exposure.

Exporters are maintaining a balanced approach. The UK FTA is seen as a growth driver, but the US market remains vulnerable to tariff shifts that could alter sourcing decisions.

Companies are not planning to exit the US, but they are ready to redirect volumes if needed. The sector’s growth will depend on how soon US tariff tensions ease and how quickly the UK deal delivers sustained order growth.