Profitability of RMG exporters dependent on the U.S. could contract 300-500 basis points, says Crisil Ratings.
| Photo Credit: SIVA SARAVANAN S
Revenue growth of India’s readymade garment (RMG) industry is set almost to halve on-year this fiscal as the imposition of 50% tariffs by the U.S. comes into effect from August 27, according to a Crisil Ratings study.
That, coupled with a decline in profitability, will impact credit metrics for industry players, it said.
The U.S. is the single-largest market for India’s textile and apparel items, accounting for almost 28% of the exports and was close to $11 billion in 2024-2025.
Manish Gupta, Deputy Chief Rating Officer, Crisil Ratings, said, “We expect the share of the U.S. in India’s RMG exports to fall from 33% last fiscal to 20-25% this fiscal.”
Profitability of RMG exporters dependent on the U.S. could contract 300-500 basis points. Potential oversupply in the domestic market might also impact domestic margins to some extent. Therefore, profitability at the industry level may dip 50-150 bps this fiscal. This will also pare down players’ credit metrics, it said.
The Confederation of Indian Textile Industry (CITI) said it looks forward to immediate upfront support from the government.
“The government has been discussing with industry on how it can come to our aid during this critical juncture. But, given the gravity of the situation, it is our expectation that concrete measures in the form of fiscal support and policy decisions related to raw material availability would be taken immediately,” said its chairman Rakesh Mehra.
Published – August 26, 2025 08:34 pm IST
