Trident, Welspun to KPR Mill: Textile stocks rise after Trump's tariffs on Bangladesh; here's how

Shares of Indian textile firms such as Trident, Welspun, Gokaldas Exports, KPR Mill, Vardhman Textiles, and Arvind gained during Tuesday's trading session following the announcement of a 35% tariff on Bangladesh by the Donald Trump administration in the US.

While this represents a slight decrease from the 37% rate announced in April, it remains above the baseline tariff rate of 10%. There is still an opportunity for negotiation until August 1, which is when the tariffs will take effect.

Last week, the US finalised a trade agreement with Vietnam, imposing tariffs of 20% on all Vietnamese exports to the US and 40% on goods that are transshipped, meaning shipped through a third country to evade tariffs.

As per reports, India presently imposes a 10% tariff, but the textile industry, due to varying rates, endures tariffs that can reach 26%. In the US ready-made garment sector, Bangladesh holds a 9% market share, while Vietnam has a 19% market share. India’s market share is at 6%.

A trade agreement between the US and India is anticipated soon, with the Indian delegation having just returned from Washington last week.

According to experts, if tariffs are reduced during the signing of this agreement, both India's competitive advantage over other exporting nations and its market share are likely to increase.

Conversely, if tariffs remain the same, India may lose its competitive edge over Vietnam for exports to the US.

(more to come)

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