US 12.5% forced-labour tariff threatens 8-10% margin hit for Indian RMG exporters to Walmart, Target, Gap
Section 301 tariff freezes sourcing upgrade plans across Tirupur, Coimbatore and Surat clusters. Synthetic segment most exposed via Chinese inputs ($3.8B FY26); cotton traceability lags with only 25-30% of consignments certified. US accounts for 25-26% of India's $15.8B FY26 apparel exports.
US 12.5% Section 301 forced-labour tariff threatens Indian RMG exporters' margins by 8-10%, freezing Walmart/Target/Gap sourcing upgrade plans. Synthetic segment most exposed due to Chinese inputs; cotton traceability remains a logistical challenge for mass-market exporters.
Why this matters
Tariff lands as Indian RMG exporters face cotton traceability gaps and synthetic input dependence on China, stalling sourcing upgrades just as US buyers Walmart, Target and Gap tighten compliance.
Retail-brand signals steady at 1,764 over 90 days, indicating sustained sourcing and compliance pressure.