As US raises tariff pressure, Indian garment factories keep supplying American brands

AHMEDABAD, India: Production in India’s garment sector continues even as trade tensions with the United States escalate over New Delhi’s ongoing purchases of Russian oil.

AI Brief

Trump imposed 25% tariffs on Indian goods and criticised India's Russian oil imports, calling them a threat to global stability.
India defends its oil purchases as helping stabilise global prices and rejects US pressure.
Despite tensions, Indian garment exports to US brands like Levis remain active and unaffected for now.

On Tuesday (August 5), workers at a garment manufacturing unit in Ahmedabad, operated by Arvind Fashions Ltd, were seen stitching denim, applying laser patterns, and using embroidery machines to attach logos for U.S. brands like Levi’s. Clothing was being tagged, folded, and prepared for export—signs that trade with American companies remains active despite growing political strain.

U.S. President Donald Trump has threatened to sharply raise tariffs on Indian imports, accusing India of “fueling the war” in Ukraine through its oil trade with Russia. Indian officials have rejected the criticism, arguing that their purchases help stabilize global energy prices.

Trump's threat to India over its purchases of Russian oil started on July 31, when he announced a 25% tariff for Indian goods, along with an unspecified penalty.

"They're fueling the war machine, and if they're going to do that, then I'm not going to be happy," Trump told CNBC in an interview on Tuesday, adding that the main sticking point with India was that its tariffs were too high.

"Now, I will say this, India went from the highest tariffs ever. They will give us zero tariffs, and they're going to let us go in. But that's not good enough, because of what they're doing with oil, not good."

Despite the diplomatic rift, India’s apparel industry—one of its largest export sectors—continues to fulfill orders for major U.S. retailers.

An Indian government source said that India's purchases of Russian oil have helped to stabilize global oil prices by easing the pressure on supplies from other regions.

India, the world's third biggest oil importer and consumer, buys more than a third of the oil it needs from Russia.

The U.S. embassy and the EU's delegation in New Delhi did not immediately respond to a request for comment.

Both the United States and EU have reduced their trade ties with Russia since it launched its full-scale invasion of Ukraine.