Gokaldas Exports, Arvind Share Price Tumble as Textile Stocks Fall on 50% RoDTEP Cut

Why Textile Stocks Tanked On Tuesday?

The Directorate General of Foreign Trade (DGFT) announced that RoDTEP benefits will be restricted to 50% of the notified rates and value caps across all HS lines. The scheme, launched in 2021, provides refunds of taxes and duties incurred during manufacturing and distribution that are not reimbursed under any other central, state, or local mechanism.

RoDTEP rates previously ranged between 0.3% and 3.9%, with some references noting rates up to 4.3%. Post revision, exporters will effectively receive only half of these benefits. For instance, the rebate on unginned raw cotton has been reduced to 1.55% (capped at ₹0.80 per kg) from 3.1% (capped at ₹1.60 per kg).

Additionally, the allocation for FY27 has been cut by 45% to ₹10,000 crore from ₹18,233 crore in FY26, signaling tighter fiscal support for exporters.

Key Stocks Under Pressure

Among individual counters, Gokaldas Exports declined as much as 6% to ₹703.20 in intra-day trade, slipping 11% over the past two sessions. At 12:30 pm, the stock was down around 4.5%, it was trading at ₹713.50, down ₹33.85 or 4.53% for the day. The stock touched a day high of ₹710.10. Its 52-week range stands between ₹531 and ₹1,060. Despite the recent correction, the stock has surged 31% in the past month.

Arvind Ltd fell 6.15% to ₹352, with its market capitalisation slipping below ₹9,500 crore. The stock has rallied 19% over the last month.

Pearl Global Industries dropped around 3% to ₹1,549.10, while Trident Ltd declined 3% to ₹25.81. Trident had earlier fallen about 3% in morning trade. Pearl Global has gained 14% in the past month.

Other textile players also witnessed declines. Vardhman Textiles was down 6.2%, while Indo Count Industries, Welspun Living, and Kitex Garments fell between 2.5% and 3.5%.

Garment-focused names such as Kewal Kiran Clothing, Lux Industries, Dollar Industries, Aditya Birla Fashion and Retail Ltd, Aditya Birla Lifestyle Brands, and Credo Brands Marketing declined between to 2% to 3%.

Among microcaps, Fractal Industries, Garment Mantra Lifestyle, SP Apparels, VIP Clothing, and Thomas Scott (India) tanked up to 5%.

In comparison, the BSE Sensex was down 1.2% at 82,307.40 around 12:39 pm, reflecting broader market weakness.

Global Trade Uncertainty Adds Pressure

Textile stocks are highly sensitive to global trade policy. While recent developments hinted at tariff rollbacks in the US, ambiguity around implementation has kept investors cautious. The US administration is also considering new tariff measures, adding to volatility.

Indian exporters had earlier seen a rally following the announcement of a long-awaited India–US trade deal. However, sentiment weakened after the US committed to reducing tariffs on certain Bangladeshi textile imports to zero, giving Bangladeshi exporters a competitive edge.

India’s exports rose marginally by 0.61% to $36.56 billion in January, while the trade deficit widened to a three-month high of $34.68 billion.