Why Textile Stocks are Falling

India is emerging as a global leader in textiles by combining its rich heritage with modern technology and advanced manufacturing, giving it a competitive edge in the industry.

India's textile industry contributes 2.3% to the country's GDP, 13% to industrial production, and 12% to exports.

These companies may not be in the spotlight, but many have strong manufacturing capabilities and popular brands. They have succeed by controlling costs, specialising in specific areas, and building customer loyalty.

Despite these strengths, textile stocks are facing downward pressure on the stock market.

Let's explore the reason for the sharp fall.

25% US Tariff

Indian textile stocks including, Gokaldas Exports, Welspun Living, Indo Count Industries, and Pearl Global plummeted up to 7% today after US President Donald Trump announced a 25% tariff on Indian imports starting from 1 August 2025, along with a penalty for buying oil from Russia.

The US is India's biggest market for textile and apparel exports, making the sector vulnerable to trade disputes.

The 25% tariff has created a big challenge for Indian exporters, making their products costlier and less competitive.

India competes with Bangladesh, Vietnam, and China in apparel exports. While Bangladesh faces a 35% US tariff, Vietnam has agreed to a 20% tariff, giving them a competitive edge over India.

Indian Textile Companies Heavily Reliant on the US

Nearly 80.8% of Gokaldas Exports' revenue comes from the US market.

So the 25% tariff is expected to impact the company's revenue and profits significantly.

Similarly, companies like Indo Count Industries with 70% revenue from the US and Welspun Living (about 63%), have huge exposure to the US market.

So the tariff hike is likely to affect their revenue and profits.

Long Term Future of the Textile Sector

The textile industry is shifting towards sustainability by making clothes from natural materials like cotton, silk, and wool. These firms are also innovating by recycling plastic waste into fabric and promoting eco-friendly fashion.

In the future, digital textile printing is expected to help small businesses fulfill small orders efficiently by printing designs directly onto fabric, reducing costs, and driving innovation and competitiveness.

Textile dyeing in plants often face power outage due to high electricity usage. To solve this problem, many are switching to thermal energy solutions, like boilers, which generate heat to power machines, increasing efficiency and reducing reliance on electricity.

The industry is moving towards a circular economy where clothes can be easily recycled or biodegraded. An example is a special yarn that breaks down quickly in landfills, allowing bacteria to digest it faster and reducing environmental harm.

New scientific innovations are transforming textiles with special and spinning techniques that make fabric stain-resistant, antibacterial, waterproof and more durable.

These advancements also keep clothes comfortable and stretchy, enhancing functionality and providing a better experience for the customer.

How Indian Textile Stocks Have Performed Recently

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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.

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...