Trump Tariffs and Iran War Slam India’s $100 Billion Garment Export Dream

India’s textile industry, a backbone for over 45 million jobs, is caught in the crossfire of Trump’s trade wars and a volatile Middle East conflict. After Washington’s brutal 50% tariffs last August made Indian garments uncompetitive, a brief reprieve in February was shattered by the U.S.-Israel strike on Iran that ignited a costly war.

This conflict has disrupted the critical Strait of Hormuz shipping routes, driving up energy and freight costs. Polyester prices, tied to petroleum, have jumped more than 40%, squeezing manufacturers like Filatex India who are already cutting production by 25%. The cost squeeze is so severe that companies can’t pass hikes onto customers without risking a collapse in demand.

Migrant textile workers are also fleeing amid shortages of basic cooking fuel, further destabilizing production. Industry leaders warn that without sustained peace and stable oil prices, the fragile ceasefire will do little to revive the sector’s fortunes.

India had pinned hopes on trade deals with the U.K., EU, and U.S. to fuel a 12-15% annual growth rate in textile exports. Instead, growth is limping at around 9%, with companies like Pearl Global Industries fearing a repeat of the Ukraine war’s retail slump in the U.S.

The combined impact of Trump’s tariffs and the Iran war is pushing India’s garment exporters toward survival mode rather than expansion—jeopardizing a $100 billion export ambition that once seemed within reach. This crisis exposes how geopolitical recklessness and protectionist policies abroad can devastate global supply chains and workers’ livelihoods at home.