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Ministry of Textiles | Department of Commerce | Ministry of MSME | Ministry of Finance
The Ministry of Textiles addressed an Unstarred Question in the Lok Sabha on December 9, 2025, regarding the impact of tariff changes implemented by the United States of America on the Indian Textile and Apparel (T&A) industry.
Overall Export Performance and Impact:
The Ministry stated it is regularly monitoring the export of T&A and Handicrafts to the United States and other global markets.
Indiaβs total exports of Textiles & Apparel, including handicrafts, stood at US$ 20,401.95 million during the period of April-October 2025.
This performance reflects a marginal decrease of 1.8% compared to the US$ 20,728.05 million achieved during the same period in the previous year.
The Ministry did not provide specific details on the total estimated financial loss or gain in terms of turnover and employment that was attributable directly and solely to the US tariff changes.
Government Policy and Support Measures:
The Government has initiated several proactive steps to support affected textile exporters and mitigate market risks, categorized as follows:
Financial and Credit Support: The Credit Guarantee Scheme for Exporters (CGSE) has been approved. This scheme provides 100% credit guarantee coverage for additional credit facilities of up to Rs. 20,000 crore to eligible exporters, including MSMEs, aiming to enhance global competitiveness.
Market Diversification: A comprehensive 40-country market diversification strategy has been formulated11. This strategy involves targeted outreach by Export Promotion Councils (EPCs) and industry delegations to reduce market concentration risks and build a more resilient global footprint for the Indian textile industry.
Trade Agreements: The Ministry is actively pushing for the early conclusion of Free Trade Agreements (FTAs) with key developed economies and countries in the Global South. The objective is to reduce tariff and non-tariff barriers, simplify export procedures, and enhance the competitiveness of Indian exporters in partner markets.
Institutional Coordination: The establishment of the Export Promotion Mission (EPM) anchored in a collaborative framework involving the Department of Commerce, Ministry of MSME, Ministry of Finance, and other financial institutions and EPCs.
Policy Relevance
This response highlights a critical policy pivot in the face of global trade protectionism. The government is shifting its strategy from traditional market reliance to aggressive market diversification (the 40-country strategy) and structural reform. The implementation of the Credit Guarantee Scheme for Exporters (CGSE) and the push for early FTAs signal a move to actively lower financial risk and remove non-tariff barriers for textile MSMEs, ensuring the sector remains viable despite external market pressures.
What is the Credit Guarantee Scheme for Exporters (CGSE)? The Credit Guarantee Scheme for Exporters (CGSE) is a scheme approved by the Government of India that provides a 100% credit guarantee to Member Lending Institutions (MLIs)16. Its purpose is to encourage MLIs to extend new or additional credit facilities to eligible exporters, including MSMEs, with total potential coverage of up to Rs. 20,000 crore to boost their global competitiveness.
Relevant Question for Policy Stakeholders: How will the Ministry of Textiles quantitatively track the success of the 40-country market diversification strategy and ensure that MSMEs effectively utilize the Rs. 20,000 crore CGSE credit guarantee to reverse the current 1.8% export decline?
Follow the full news here: TAXATION TARIFF CHANGE ON TEXTILE INDUSTRIES