New Delhi, Aug 26 (UNI) Revenue growth of India’s readymade garments is set to decline massively this fiscal as the imposition of 50 per cent tariff by the US on its imports from India become effective from 27th August 2025 as per the Crisil report.
The ‘Ready-Made Garments (RMG)’ market is a market for clothing that is manufactured in factories to standard sizes and sold in retail stores. This sector is a major part of the global textile industry with an emphasis on the production of garments for both domestic and traditional markets.
The Crisil report noted, “ Weaker revenue growth and tariff-driven competitive disadvantage in the US will impact the profitability of Indian manufacturers. Profitability of RMG exporters dependent on the US could contract 300-500 basis points as they will bear the tariff brunt. Further, potential oversupply in the domestic market may also impact domestic margins to some extent.”
Manish Gupta, deputy chief ratings officer, Crisil Ratings, said, “ If the tariffs hold, RMG exports to the US will see a sharp decline. In the first quarter of this fiscal, total exports from India rose to 10 per cent on-year to USD 4 billion, with exports to the US recording a 14 per cent growth during the same period.”
This economic situation gives early signs that to realign trade with other major export destinations including the European union (EU), United Kingdom (UK) and the United Arab Emirates (UAE).
“ The domestic market for RMG, accounting for three-fourths of the sector’s revenue, will continue to see steady revenue growth of 8-10 per cent this fiscal, fueled by economic growth, interest rate cuts and tax deductions,” says Gautam Shahi, Director, Crisil Ratings.
