Shares of Indian textile companies surged on Tuesday, July 8, after the United States imposed a steep 35% tariff on all imports from Bangladesh, sparking expectations of increased sourcing from India. The tariff, part of a broader set of global trade measures announced by US President Donald Trump, is set to take effect from August 1.

Textile exporters like Vardhman Textiles Ltd. and Gokaldas Exports Ltd. rose over 7%, while Alok Industries Ltd. jumped 13%, Raymond Lifestyle Ltd. surged nearly 8%.

The sharp tariff hike on Bangladesh, one of the largest suppliers to the US apparel market, makes India a more attractive sourcing destination, especially as companies look to de-risk their supply chains. Bangladesh holds around 9% market share in the US readymade garment segment, while India accounts for 6%, and Vietnam leads with 19%.

India currently faces a 10% base tariff, but product classifications and varying rates mean actual duties can go up to 26% in some textile categories. By comparison, Vietnam recently agreed to a US trade pact with 20% tariffs on direct exports and 40% on transshipped goods, a move also expected to reshape the competitive landscape.

Trump’s sweeping tariff plan doesn’t stop at Bangladesh. A 25% duty will apply to imports from Japan and South Korea, while other nations including Indonesia, Cambodia, and Serbia face rates ranging from 30% to 40%. 

Even if tariff rates remain unchanged, India could still benefit from supply chain realignment and improved order flows. 

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