New Delhi, Aug. 29 -- The spectre of steep US tariffs hammered has Indian textile stocks over the past month. Until 26 August, shares of Trident Ltd, Arvind Ltd, Welspun Living Ltd, and Indo Count Industries Ltd had shed 10-15%, while smaller peers such as Himatsingka Seide Ltd, Kitex Garments Ltd and Faze Three Ltd suffered even deeper corrections. Those fears crystallized on 27 August, when Washington issued a draft notice to impose 50% tariffs on Indian imports.

For companies with large exposure to the US, the move threatens volumes, margins and, ultimately, earnings downgrades unless a trade deal is reached.

"Retailers were comfortable with 25% tariffs imposed earlier (~5% disadvantage) which could have been absorbed through negotia...