Tackling US Tariffs: How Russian Crude Discounts Can Save India's Textile Industry

A crucial industry employing 45 million people and exporting $35 billion annually, India's textile sector is reeling from a 50% US tariff imposed on August 27, 2025, the most globally. This has caused production stops in important centers like Tirupur, Noida, and Surat; Indian textiles now have a 30–35% pricing disadvantage against rivals from China, Vietnam, and Bangladesh. As 30% of textile exports go toward the US market, the levies endanger export viability and job security.

One strategic approach is to capitalize on India's access to discounted Russian crude oil, now priced at $62.22 per barrel with $3-4 discounts, which is expected to become more severe. with the EU's new price limit of $47.60 beginning September 3, 2025. Indian refiners have made major profits from these discounts, but the advantages have not reached textile companies that depend on petroleum-derived synthetic fibers like polyester. Directly lowering input costs for garment manufacturers could be the outcome of government involvement requiring PSU refineries to bring down polyester intermediate costs.

This targeted approach, similar to the recent waiver of import tariffs on raw cotton, offers immediate relief by stabilizing production expenses and preserving jobs. India can maintain export competitiveness against countries with lesser US taxes by diverting the financial advantages of lower Russian crude for textile manufacturers, thus, as Vietnam and Bangladesh (20%) and China (26–27%), adapting to changing trade conditions.