Textile Stocks Slide After Trump Approves Russia Sanctions Bill

Shares of several Indian textile exporters witnessed a sharp decline on Monday after US President Donald Trump signed into law a bill authorizing tariffs of up to 100% on countries importing Russian oil and gas. This move has triggered investor concerns about possible new trade barriers that could hurt Indian exports to the United States, a crucial market for the sector.

Among the most affected, Gokaldas Exports saw its stock price fall nearly 5%, trading below Rs 630 on the NSE. Indo Count Industries and Vardhman Textiles each experienced drops exceeding 3%, while Arvind’s shares declined by more than 2%. The broader market showed positive momentum, but these textile firms faced distinct pressure due to the legislative development.

The legislation, named the Lindsey O Graham Sanctioning Russia and Iran Act of 2026, was signed by President Trump on Friday. It aims to increase economic sanctions on Russia in response to its ongoing invasion of Ukraine. A key provision of the act empowers the US administration to impose steep tariffs on nations continuing to purchase Russian energy resources. Countries like India and China, significant buyers of Russian oil and gas, could face new tariffs on their exports to the US, thereby impacting their trade dynamics.

India’s textile and apparel market relies heavily on the United States, making the sector particularly vulnerable to any tariff hikes. The Confederation of Indian Textile Industry (CITI) voiced strong apprehensions about the potential consequences of this legislation. CITI Chairman Ashwin Chandran remarked, "Any additional tariffs under this Act will be very difficult to absorb for the MSME-dominated Indian textile and apparel sector already under stress due to several factors, including the continuing turmoil in West Asia. It will severely impact our ability to sell in the United States, our most significant market by a distance."

Chandran further emphasized the need for enhanced diplomatic engagement between the Indian government and US authorities. He called for a "fair, balanced and equitable bilateral trade agreement" to safeguard Indian exporters from losing competitiveness in the US market. Negotiations for such a trade deal have been ongoing but have yet to reach a conclusion.

Examining recent trade data provides additional context to the sector's sensitivity to US policies. Between April and August 2026, India’s overall textile exports to the US increased by 6.94% in dollar terms. However, apparel exports declined by 9.10% during the same period, resulting in a slight overall decrease of 0.24% in combined textile and apparel exports year-on-year. These figures underscore the fragility of the market segment and the potential impact of any new trade restrictions.

The bill honors Senator Lindsey O. Graham, a South Carolina Republican known for his strong stance against Russia, who passed away in July 2026. It passed the US House of Representatives in mid-September after clearing the Senate the previous month. The law reflects a bipartisan consensus in Washington to intensify economic pressure on Russia amid geopolitical tensions.

Indian textile exporters face a challenging environment not only due to international sanctions and trade policies but also because of domestic factors such as the predominance of micro, small, and medium enterprises (MSMEs) within the industry. These smaller units often lack the financial resilience to absorb sudden cost increases resulting from tariff changes.

Market analysts suggest that the US sanctions law could trigger a reevaluation of supply chains and export strategies for Indian textile companies. Diversification of markets beyond the US might gain priority, while industry bodies continue to advocate for protective measures and negotiations to secure favorable trade terms.

As the global economic landscape adjusts to geopolitical developments, Indian textile exporters remain watchful of policy shifts in key markets. The outcome of ongoing trade discussions with the United States will be instrumental in shaping the sector’s trajectory in the coming months.