Textile Shares Rally on US Trade Deal Optimism

Shares of Gokaldas Exports and other textile companies surged significantly on Thursday, October 23, amid growing optimism over a potential trade deal with the United States. Gokaldas Exports shares gained up to 12%, Kitex Garments rose 14%, and Vardhman Textiles, Nitin Spinners, Welspun Living, and Indo Count Industries climbed between 6% to 10%, reflecting investor confidence in improved export prospects.

The optimism comes in the backdrop of the US currently imposing 50% tariffs on Indian textile exports, which has heavily impacted the sector. Most of these companies rely on the US as their largest client base, with 50% to 70% of their overall revenue coming from the American market, making any easing in trade barriers a major positive catalyst for stock performance.

Background on US Tariffs

The US first imposed a 25% tariff on Indian exports after trade negotiations failed to meet deadlines, later increasing it to 50%, citing India’s purchase of oil from Russia amid the Russia-Ukraine conflict. The tariffs have particularly affected the textile industry, which has a significant exposure to US demand.

US President Donald Trump recently expressed optimism, stating that the US is “working on a great deal with India.” He also noted that India would not be buying as much oil from Russia, signaling a potential improvement in bilateral trade relations compared to earlier statements suggesting a complete halt on Russian oil imports. This renewed diplomatic clarity has fueled positive sentiment in the stock market.

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Stock Performance So Far in 2025

Despite Thursday’s sharp gains, many textile stocks have faced headwinds earlier in the year. Shares of Gokaldas Exports are down 23% so far in 2025, while Indo Count Industries shares have fallen 17%. Nitin Spinners and Welspun Living have declined 24% and 20% respectively, reflecting the heavy impact of tariffs and global uncertainties.

However, some companies like KPR Mill have bucked the trend, rising 9% year-to-date, showcasing resilience in certain segments of the textile sector. Thursday’s rally indicates that investor sentiment could turn positive if trade negotiations with the US continue to progress favorably.

Implications for the Indian Textile Industry

The potential easing of US tariffs could provide a significant boost to Indian textile exporters, many of whom depend heavily on the US market. Improved trade relations would not only enhance revenue prospects but could also restore investor confidence in a sector that has struggled with policy uncertainty and global trade tensions.

Market analysts view the current rally as a reflection of hope for policy clarity and growth, with the US trade deal seen as a potential turning point for the sector after months of underperformance. Investors are watching closely for updates from bilateral talks, which could determine the trajectory of textile shares in the coming weeks.

Conclusion

Shares of Gokaldas Exports and other Indian textile companies surged sharply on October 23, fueled by optimism surrounding a potential US trade deal that could ease tariffs. With a large proportion of revenue tied to the US market, any positive resolution in trade talks would have wide-reaching implications for earnings, investor sentiment, and the overall health of the Indian textile industry.

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