CITI chairman calls US forced-labor tariff proposal a 'serious threat' to India's $11 billion textile exports to America

The Confederation of Indian Textile Industry (CITI) has described a proposed United States tariff on goods linked to forced labor as a "serious threat" to India's textile and apparel sector, while rejecting the underlying allegations as "completely false" and "unfair." The comments were made by CITI Chairman Ashwin Chandran in an interview with ANI at Coimbatore, as reported by Apparel Views and The Tribune.

According to both publications, the United States has proposed fresh tariffs on 60 countries over the export of goods made with forced labor, including India, which does not have a reciprocal trade agreement with Washington.

The US is India's single largest textile market

Chandran stressed how much is at stake. India exported USD 36 billion in textiles and clothing last year, and about USD 11 billion — roughly 40 per cent — went to the United States, which he called the country's single largest trading partner and export destination for the sector.

"This is a serious threat for Indian textile and apparel industry," he said, adding that the industry is "countering these allegations" and "countering this investigation." Any additional duty, he argued, would hit manufacturers and exporters directly. "Whether the tariff is 10 per cent, 12 per cent, 13 per cent, 14 per cent, 15 per cent, 20 per cent, any tariff will definitely hurt Indian textile exports and Indian textile companies will suffer losses," he said.

Seasonal orders and discounts

Chandran warned that the damage could outlast any single tariff decision because textiles is a seasonal industry. "Once you lose customers, it is very difficult to gain back the customers in a short period of time," he said. Losing orders for one season would mean losing three or four months of business, with production severely affected.

To hold on to buyers, exporters have already been cutting prices. According to Chandran, various companies have offered discounts of between 15 and 25 per cent to retain their customers.

Forced-labor allegations rejected

Chandran firmly denied the forced-labor claims, calling them "completely unfair, completely false." He said labour reforms and awareness initiatives had significantly improved practices, and that in the organized sector there are now no instances of child labor or bonded labor. He added that global brands and retailers regularly conduct stringent audits of their suppliers.

Asked about diversification, Chandran acknowledged that the industry remains "dependent on the US and EU" and is seeking new markets. He said trade agreements such as Oman's CEPA and arrangements with New Zealand are beneficial to that effort.

What it means for trade flows

For importers and exporters, the immediate exposure is concentrated in the roughly USD 11 billion of Indian textile and apparel that ships to the US market each year. A duty in the 10 to 20 per cent range would raise landed costs for American buyers and pressure Indian suppliers already offering 15 to 25 per cent discounts. With the sector's dependence on the US and EU, diversification toward Oman, New Zealand and other markets is positioned as the industry's hedge against the proposed measure.