Kitex, Trident to KPR Mill: Textile stocks skyrocket up to 20% on India-US trade deal. Should you buy?

India-US trade deal impact: Textile stocks rallied up to 20% in intraday deals on Tuesday, February 3, as the sector is being seen as one of the biggest beneficiaries of the India-US trade deal announced late last evening.

India and the United States have agreed to a trade agreement under which reciprocal tariffs on Indian goods will be slashed to 18% from 25%, and the additional 25% duty on purchases of Russian crude oil will be eliminated.

The trade deal will be "effective immediately", US President Donald Trump said, following a phone call with Prime Minister Narendra Modi late Monday, offering immediate tariff relief for India.

Following this announcement, textile stocks like Kitex Garments and Indo Count zoomed 20% each. Welspun Living, KPR Mill, Arvind, Trident, Bombay Dyeing and Vardhaman Textiles shares gained up to 18%.

Labour-intensive sectors such as textiles, gems and jewellery, and engineering goods are being seen as the clear winners, as all faced growth headwinds due to higher tariffs.

The US remains India's top market, taking 28% of its textile and apparel exports, worth about $11 billion out of $38 billion in the financial year ending March, 2025, a Reuters report showed.

In the presence of the steep tariffs on Indian textiles, the US shipments fell more than 50% in October-December from July-September for nearly one-quarter of textile exporters, a CITI survey, quoted by Reuters, showed.

India recently struck a free trade agreement with the European Union, which is the second-largest textile market for Indian exports.

A tariff cut could provide a fresh impetus to the textile market. At 18%, India's tariff rate is also lower than that of several major export-oriented Asian economies. Bangladesh, Sri Lanka, Taiwan and Vietnam face tariffs of 20%, while Indonesia, Malaysia, Thailand, the Philippines and Pakistan face tariffs of 19%.

For a sector that has spent the last two years grappling with inventory destocking, weak demand, and margin pressure, this development acts as a structural relief rather than a short-term sentiment trigger.

Should you buy textile stocks after India-US trade deal?

Among textile companies, Harshal Dasani, Business Head at INVAsset PMS, said that the biggest beneficiaries are companies with high US exposure, strong execution capabilities, and a value-added product mix.

He expects export-focused apparel manufacturers to see faster order normalisation as US buyers diversify sourcing away from higher-tariff regions.

Among the top textile stocks that could gain in this context, according to him, are Gokaldas Exports, Indo Count Industries, Welspun Living, Pearl Global Industries and KPR Mills.

"Gokaldas Exports stands out as a direct play on US apparel demand, while Pearl Global Industries offers leverage to garment exports with improving scale. In home textiles, Indo Count Industries and Welspun Living are well positioned given their long-standing US retailer relationships and ability to absorb volume growth," Dasani said.

Integrated players such as KPR Mill could also benefit, supported by supply-chain control and operating efficiency, though outcomes will remain sensitive to cotton prices and demand recovery, he added.

That said, he believes this is not a blanket opportunity across the sector. Commodity-heavy yarn manufacturers may see limited benefit as pricing gains tend to get competed away.

Sunny Agrawal - Head of Fundamental Research at SBI Securities, said In the textile sector, companies with US exposure ranging between 20% and 70% — such as Gokaldas, Welspun India, Himatsingka Seide, Trident, and SP Apparels— will be the primary beneficiaries.

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