The shares of Gokaldas Exports surged 8.2% on Tuesday, reaching a high of Rs 974.70, and leading the gains among textile stocks. Vardhman Textiles shares followed closely, rising 7.9% to touch Rs 537.70. KPR Mill shares climbed 4% to reach Rs 1,204.85 during the session, while the shares of Arvind Ltd gained 2.9%, hitting an intraday high of Rs 356.35.
The newly announced tariff, which takes effect from August 1, is a slight drop from the 37% rate that had been proposed earlier in April. However, it still stands significantly above the standard 10% tariff baseline and is expected to impact Bangladesh’s competitiveness in the global garment supply chain.
While the US has left the door open for negotiations in the weeks leading up to the implementation, the announcement has already prompted a reassessment of sourcing strategies among American buyers.
The tariff escalation comes on the heels of a recent trade agreement signed between the US and Vietnam, which imposes a 20% tariff on direct Vietnamese exports and a steeper 40% duty on transshipped goods—exports routed through Vietnam but originating in other countries to bypass tariff walls.
Currently, India faces a 10% tariff on textile exports to the US, but due to product classifications and differential rates, some segments experience tariffs as high as 26%. The shift in tariff dynamics is expected to realign competitive advantages, especially if further negotiations tilt in India’s favor.Industry is likely to closely track the developments around a potential trade agreement between India and the US, especially after the return of an Indian delegation from Washington last week. Any easing of tariff burdens on Indian textile exports during such a deal could help improve India’s price competitiveness and expand its market share in the US.However, it should be noted that if tariff levels remain unchanged for Indian goods while others are adjusted downward, especially for Vietnam, India’s advantage in the export market may narrow.
Also read: Jane Street probe: Sebi chief Tuhin Kanta Pandey rules out weekly expiry ban, signals tighter derivatives watch
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
