Export-focused textile stocks like Gokaldas Exports, Welspun Living, and KPR Mills, which have been in a steady uptrend since the trade deal announcement last week, extended their bull run on Monday, February 9, after the confirmation of an interim India–US trade pact.
Textile exports to the US now attract a lowered tariff of 18%, thereby increasing their competitiveness vis-à-vis Asian peers.
Gokaldas Exports share price led the pack, gaining as much as 5.60% to ₹826.25 apiece. Vardhman Textiles, Welspun Living and KPR Mills shares rallied 3%. Other textile stocks like Trident also rose nearly 2% to ₹28.21 in trade today.
In a week alone, textile stocks have zoomed up to 40% amid trade deal optimism. Gokaldas Exports’ stock has emerged as the biggest gainer, as it soared 42%. Welspun Living, KPR Mills, Vardhman and Trident have gained up to 19%, reflecting increased investor interest in the segment.
Why are textile stocks rallying?
“Under the agreement, United States will apply a reciprocal tariff rate of 18 percent under Executive Order 14257 of April 2, 2025 (Regulating Imports With a Reciprocal Tariff to Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits), as amended, on originating goods of India, including textile and apparel,” the White House stated in its joint statement with India over the weekend as they released an interim framework that would lower tariffs.
US President Donald Trump last week announced that a trade pact with India has been reached, with a lower tariff of 18% from 25% earlier.
The US continues to be the biggest destination for India’s textile exports, and the new tariff structure is expected to enhance India’s role in global textile supply chains.
In the last financial year, India exported textiles worth $8.3 billion to the US, which is 9.6% of the total exports to the nation. In the ongoing financial year, the exports as of November stood at $5.1 billion.
“For textiles, the impact is particularly significant given that the US is one of the largest end markets for Indian apparel and home textiles. Reduced tariffs enhance price competitiveness against peers such as China and Bangladesh, potentially leading to order diversion in India’s favour. Higher volumes, better capacity utilization, and operating leverage could gradually translate into margin recovery and more stable earnings for exporters,” said Anil Rego, Founder and Fund Manager at Right Horizons PMS.
Ministry of Textiles was quoted as saying by PTI that the 18% reciprocal tariff on Indian textile goods, including apparel and made-ups, eliminates the earlier disadvantage for Indian exporters and gives them an edge over competitors such as Bangladesh (20%), China (30%), Pakistan (19%) and Vietnam (20%). The ministry added that this change is likely to influence and reshape global buyers’ sourcing strategies.
The ministry said the trade agreement is likely to be crucial in helping India reach its export goal of $100 billion by 2030, with the US expected to account for over one-fifth of the target. It further added that the deal would give the necessary push to the sector, improve cost competitiveness, and support supply chain diversification by allowing the textile industry to source intermediate inputs from the US.
Commenting on the top beneficiaries from the textile sector, Harshal Dasani, Business Head at INVasset PMS, told Mint earlier that Gokaldas Exports stands out as a direct play on US apparel demand, while Pearl Global Industries offers leverage to garment exports with improving scale.
In home textiles, Indo Count Industries and Welspun Living are well-positioned given their long-standing US retailer relationships and ability to absorb volume growth, he opined.
“Meanwhile, integrated players such as KPR Mill could also benefit, supported by supply-chain control and operating efficiency, though outcomes will remain sensitive to cotton prices and demand recovery,” Dasani added.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
