India's textile and apparel exporters continue to face a 10% tariff disadvantage in the US market, even as roughly $520 million in input trade flows between the two countries, according to a Fibre2Fashion report.

The gap matters for sourcing decisions. US buyers comparing India against competitors such as Bangladesh, Vietnam and Pakistan now weigh a tariff structure that adds direct cost to Indian-made goods. A persistent 10-point differential can shift order allocation long before factory capability or lead times come into play.

The $520 million input trade figure underscores the irony: American mills and brands supply materials into India's production chain, while finished Indian output re-enters the US carrying a higher duty burden. For supply-chain managers, that means the same corridor is being priced twice — once as an input lane, once as a finished-goods lane with a penalty attached.

Why the 10% gap matters for buyers

Tariff differentials of this size translate into margin pressure at the FOB level. A 10% duty gap on apparel can erase the labor-cost advantage that motivates sourcing from India in the first place. Buyers with multi-country vendor bases can redirect orders to lower-duty origins without changing their product engineering or delivery calendars.

For Indian suppliers, the risk is twofold:

• Order attrition to competing origins with more favorable US tariff treatment
• Price concessions demanded by buyers seeking to absorb part of the duty burden at the factory gate

What comes next

Indian industry bodies have repeatedly pressed for a resolution that would narrow the differential, whether through bilateral trade negotiations or sector-specific arrangements. Until a deal is confirmed, exporters and their US customers should treat the 10% gap as a live cost factor in 2025-26 sourcing plans rather than a temporary distortion.

The figure at stake — $520 million in two-way input trade — suggests both governments have a commercial base large enough to justify a negotiated fix. Whether that happens before orders migrate elsewhere remains the open question for the season ahead.