TCF POST Report
New Delhi: India’s parliamentary committee on commerce has called for sweeping policy support for the country’s textiles, clothing and footwear industries, warning that higher US tariffs and shifting sourcing patterns threaten the competitiveness of labour-intensive export sectors unless the government accelerates reforms and concludes a bilateral trade agreement with Washington.
The recommendations, released as part of the Rajya Sabha Committee on Commerce’s 200th report evaluating India-US trade relations, place textile and apparel manufacturing among the sectors most vulnerable to prolonged tariff uncertainty while outlining a roadmap to strengthen India’s position in global supply chains.
For the textile and clothing sector, the committee urged faster diversification into technical textiles, man-made fibre (MMF) products, sustainable textiles, home furnishings and value-added apparel. It also recommended expediting flagship initiatives, including PM MITRA Parks, the Production Linked Incentive (PLI) Scheme and the Samarth Scheme, to modernise manufacturing and improve productivity.
To strengthen sourcing competitiveness, the committee proposed establishing dedicated MMF manufacturing clusters within new PM MITRA parks to reduce dependence on cotton and provide small and medium-sized manufacturers with easier access to synthetic raw materials aligned with global demand.
The report further recommended expanding export incentives under the RoDTEP and RoSCTL schemes, strengthening the Interest Equalisation Scheme, and providing concessional working capital, export credit and credit guarantees for textile exporters, particularly MSMEs facing tariff-related disruptions. It also suggested creating an emergency relief mechanism under RoSCTL to compensate smaller exporters forced to accept price reductions demanded by US buyers.
To improve delivery performance for international buyers, the committee proposed government-supported textile warehousing hubs at major US entry ports alongside fast-track customs corridors in India, aiming to reduce lead times and improve responsiveness against competing sourcing countries.
The report also highlighted risks to traditional textile segments. It warned that sustained tariff uncertainty could reduce incomes for carpet exporters and traditional weaving communities while allowing competitors such as Turkey, Pakistan, Nepal and China to expand their market share. It recommended greater support for branding, geographical indication (GI) promotion, international exhibitions, digital marketing, product innovation and cluster development to preserve export competitiveness.
For the leather and footwear industry, the committee called for greater emphasis on premium footwear, branded leather goods, sports shoes, safety footwear and high-value fashion accessories, arguing that India should move further up the value chain by leveraging its design and manufacturing capabilities.
The panel recommended wider adoption of automation, CAD/CAM systems, robotics, artificial intelligence, digital product development and 3D printing to improve manufacturing productivity, while encouraging investments in environmentally sustainable leather processing to meet increasingly stringent sourcing requirements from global brands.
It also urged policymakers to secure preferential or duty-free US market access for leather products and footwear, alongside targeted export finance, interest equalisation and working-capital support for MSMEs. Additional recommendations include strengthening testing infrastructure, compliance support, international certification and overseas market diversification across Europe, Japan, Australia, the Gulf region, Africa and Latin America.
Beyond sector-specific measures, the committee argued that India should accelerate negotiations on a bilateral trade agreement with the United States while strengthening domestic manufacturing competitiveness through supply-chain resilience, logistics improvements and targeted policy support for industries exposed to US tariff measures.
The report underscores India’s growing concern that tariff uncertainty is becoming a sourcing issue rather than simply a trade issue. For global apparel and footwear buyers, recommendations on MMF clusters, export warehousing, faster customs clearance and financial support reflect an effort to improve supplier reliability, shorten lead times and enhance cost competitiveness.
The emphasis on technical textiles, sustainable manufacturing and automation also signals India’s intention to reposition itself beyond traditional cotton-based apparel production as international brands increasingly diversify sourcing portfolios toward higher-value and ESG-compliant suppliers. However, implementation will determine whether these recommendations can offset rising competition from Bangladesh, Vietnam and other Asian manufacturing hubs that continue to attract global sourcing orders through established trade preferences and integrated supply chains.