Following US President Donald Trump’s statement on Truth Social that trade talks with India are still ongoing, shares of textile businesses surged up to 7% on Wednesday. By 10 am, Pearl Global’s stock increased 7%, while Gokaldas Exports’ and Welspun Living’s shares jumped by 7%. With over 70% of its sales coming from the US, Kitex Garments saw a 5% increase in price. Trident increased 6% and KPR Mill gained 3%.
Trump expressed confidence in achieving a successful agreement and stated that the two countries are still working to remove trade barriers. “I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership,” Prime Minister Narendra Modi wrote on X, previously Twitter, echoing the same optimism.
The India-UK Free Trade Agreement (FTA) is one of the other significant triggers that can be advantageous for textile majors. The agreement is anticipated to help textile exporters by eliminating the 10–12% levy that had previously harmed their ability to compete. As a result of the agreement, India now has equal access to duty-free goods as Bangladesh, Pakistan and Cambodia.
Additionally, the new GST rate for readymade clothing up to Rs 2,500 has been lowered from 12% to 5%. A lesser uniform rate of 5% will also apply to carpets, handlooms, yarns, man-made fibres and handicrafts. Since Trump raised taxes on Indian exports to almost 50% by imposing an additional 25% tariff on India, textile stocks have been under selling pressure. This undercuts the nation’s advantage in important areas like clothing because it is far steeper than the 20% imposed on counterparts Bangladesh and Vietnam.
