New tariffs imposed by President Donald Trump are likely to shake up the global garment industry, creating both winners and losers, with India poised to emerge as a key beneficiary, according to a recent report by the State Bank of India (SBI). The report suggests, India stands to gain a significant advantage over competitors like Cambodia.

The SBI report highlights, India, which currently accounts for 6 per cent of the US apparel import market, could see substantial benefits by capturing an additional 5 per cent share from rival countries. This potential increase could translate into a 0.1 per cent addition to India’s GDP, the report estimates.

India's strong position is attributed to its Revealed Comparative Advantage (RCA) in textiles, particularly its existing exports of apparel and accessories to the US. The report notes, major garment and textile exporting nations, including Bangladesh, Cambodia, and Indonesia, are now at a disadvantage due to the alterations in the US tariff structure. According to the SBI, this scenario presents ‘the perfect time for India to gain a share in the global garments export market.’

The report concludes, India should proactively leverage this shift in trade dynamics to expand its export presence, especially in garment and textile categories where it holds a comparative advantage. By capitalizing on these emerging opportunities, India can not only boost its exports but also drive incremental growth in its economy, the report states.

India's garments and textiles sector is a vital contributor to its economy, valued at over $180 billion last year. It's also one of the country's largest employers after agriculture, providing jobs for over 45 million people. The sector is projected to reach an impressive $387.3 billion by 2028, demonstrating a CAGR of nearly 15 per cent.