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Textile stocks saw a strong momentum last week after the announcement of trade deal between India and US.
Stocks such as KPR Mills, Vardhman Textiles etc were up almost 5-15%.
So, what lead to Sharp correction today?
The US White House released a notification on the US-Bangladesh trade agreement.
A key provision allows the US to reduce tariffs on Bangladeshi goods to 19%. In addition, a special mechanism enables select textile and apparel products to enter the US market at zero reciprocal tariff rates.
The zero-tariff benefit will be linked to Bangladesh's imports of US-origin textile inputs such as cotton and man-made fibres.
This move strengthens Bangladesh's position as a major global apparel sourcing hub.Following the notification on 10 February 2026, Indian textile stocks saw a sharp correction.
Shares of KPR Mills, Arvind Fashion, and Gokaldas Exports declined 4-5% intraday.
Indian textile stocks had earlier gained momentum after the India-US trade agreement, which reduced tariffs for Indian exporters.
However, with Bangladesh now receiving similar or better tariff treatment, the competitive advantage enjoyed by Indian textile companies has reduced.
This may encourage global apparel players to shift supply chains towards Bangladesh, potentially impacting the profitability of Indian textile manufacturers.
After the US-Bangladesh trade agreement, it will be important to track how Indian textile companies position themselves in an increasingly competitive global landscape.
The Indian government has announced multiple incentives for the sector in the latest Union Budget, which could provide some support to domestic players.
Several textile companies will also announce their Q3 FY26 quarter results and hold conference calls in the coming weeks. Markets will closely track management commentary on the impact of the trade agreement and their future strategy.
India's textile growth story remains structurally strong. According to India Brand Equity Foundation, the domestic textiles and apparel market is expected to grow at 10% annually, reaching US$ 350 billion by 2030.
Rising online shopping penetration in tier-two and tier-three cities is driving demand for ready-to-wear apparel.
While the US-Bangladesh trade agreement may create short-term challenges for Indian textile exporters, the long-term outlook remains favourable.
Strong domestic demand, growing global consumption, and supportive government policies continue to provide a solid foundation for the sector.
Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
To know what's moving the Indian stock markets today, check out the most recent share market updates here.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...
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