The ratification of the 2026 India-US trade agreement has fundamentally altered the competitive landscape for Odisha’s textile and garment manufacturers. By reducing reciprocal tariffs from a peak of nearly 50 per cent down to a streamlined 18 per cent, the deal effectively positions Indian goods at a more favorable rate than regional peers such as Vietnam and Bangladesh, which currently face duties exceeding 20 per cent. This fiscal de-escalation is a strategic victory for Odisha’s ‘Field to Fashion’ initiative, which aims to integrate the state’s annual production of 6 lakh bales of high-quality long-staple cotton with local processing units. Historically, limited domestic ginning capacity forced raw cotton exports to other states, but the state government is now capitalizing on this trade window by establishing new textile mills in the cotton-rich belts of Bolangir, Kalahandi, and Sonepur.

This policy shift is supported by a significant capital influx, with Odisha TEX 2025 having already secured investment proposals worth Rs 7,808 crore. Industrial leaders, including Aditya Birla Group and Shahi Exports, are expanding their footprints in clusters like the Chhatbar Apparel Park. To further secure these investments, Chief Minister Mohan Charan Majhi announced an increase in monthly employment subsidies to Rs 7,000 for female workers. This infrastructure-led growth, combined with reduced US import barriers, is expected to accelerate the state's mission to achieve Rs 3.5 lakh crore in total exports by 2027 while elevating traditional handlooms like Sambalpuri Ikat into high-value American fashion segments.

Odisha’s textile department manages the state’s apparel and technical textile policies, focusing on the entire value chain from ginning to high-end garmenting. It targets the US and EU as primary markets for its sustainable handlooms and ready-made garments. Growth plans include creating 1 lakh jobs by 2030 through specialized textile parks and increased worker subsidies.