Textile stocks in India rallied up to 9% on Wednesday, driven by optimism over a potential trade deal between India and the United States.
Among textile stocks, Gokaldas Exports share price jumped as much as 9.68%, Welspun Living shares rallied 8.88%, Vardhman Textiles stock price surged 7.9%, Pearl Global Industries shares gained 6.2%, while KPR Mill shares rose 3.29%.
The rally came after US President Donald Trump said the two countries are “continuing negotiations to address the trade barriers.”
“I am pleased to announce that India, and the United States of America, are continuing negotiations to address the Trade Barriers between our two Nations. I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries!,” Trump wrote on Truth Social.
Responding on X (formerly Twitter), Indian Prime Minister Narendra Modi expressed confidence that the talks would unlock new opportunities.
“India and the US are close friends and natural partners. I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership. Our teams are working to conclude these discussions at the earliest. I am also looking forward to speaking with President Trump. We will work together to secure a brighter, more prosperous future for both our people,” said in a post on X.
The statements come against the backdrop of heightened trade tensions, after Trump recently raised tariffs on Indian imports to 50%, dealing a blow to export-oriented sectors such as textiles. The move had triggered sharp volatility in textile stocks, but sentiment improved on Wednesday amid renewed optimism over a potential deal.
According to ICICI Direct, if India and US manage to sign a positive trade deal with a tariff rate between 10-15% it will be positive for the textile sector as other key textile exporting countries such as Vietnam and Bangladesh are imposed with 20% tariff and China with 30% tariff.
Meanwhile, Trump is pressurising the EU to impose a 100% tariff on India, which the brokerage firm believes is unlikely to have any material impact on textile companies as current exposure to EU exports is very less.
“Overall scenario build-up is positive for textile companies. We will have more clarity on trade deals and tariff rate in the coming weeks. We currently maintain our stance that FY26 will be muted for textile companies. However, signing of trades with the US and EU will boost performance in FY27,” ICICI Direct said in a note.
New Exports Markets
The rally in textile stocks also gained support after Union Minister Giriraj Singh said India is targeting 40 new countries to expand its textile exports, following the steep 50% tariff imposed by the US, the largest market for the country’s apparel shipments.
According to Singh, these 40 markets collectively account for nearly $600 billion in textile and apparel imports, presenting significant opportunities for India to increase its global share. He added that the government is also working to leverage India’s free trade agreements (FTAs) with 15 countries as part of its strategy to diversify export destinations, PTI reported.
The higher US tariff, which came into effect on August 27, is expected to hit more than $48 billion worth of Indian exports.
In FY2024–25, India’s textile and apparel sector is estimated at $179 billion, comprising a domestic market of $142 billion and exports worth $37 billion. Globally, the textiles and apparel import market was valued at $800.77 billion in 2024, with India holding a 4.1% share, ranking as the world’s sixth-largest exporter and supplying to over 220 countries.
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