DC<\/a>.<\/p>\n\u201cThis is a setback,\u201d said K M Subramanian, president of the Tiruppur Exporters\u2019 Association (TEA). \u201cStandalone exporting companies will be hit first. Buyers are already asking us to absorb part of the tariff. Our margins are just 5% to 7%; how can we share this cost?\u201d<\/p>\n
Subramanian said while 30% of Tiruppur\u2019s exports go to the US, a diverse buyer base in Europe and the Middle East may provide some cushion \u2013 but not without pain. \u201cThe non-branded buyers will shift immediately. Branded ones may stay because of the social compliance and operating protocols we offer, but we will still bleed for some time.\u201d<\/p>\n
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Textiles is a labour-intensive sector, and there are worries of job losses if the market shrinks. If exports contract 10-20% due to loss of orders, it can threaten 100,000\u2013200,000 textile and garment jobs collectively in the three hubs \u2014 Tiruppur, Karur and Coimbatore \u2014 over the next few months.<\/p>\n
Tiruppur alone contributes Rs 40,000 crore to knitwear exports, supplying global giants like Walmart, GAP, and Costco, and accounting for 55% of the country\u2019s knitwear exports. The region had hoped to expand it by 10\u201315% in FY2025\u201326. Now, the outlook is grim, with analysts forecasting a 40\u201350% fall in US-bound orders, especially in cotton and knitted apparel segments.<\/p>\n
The fallout is not confined to garments alone. In Coimbatore and Karur, known for home textiles, order stagnation has already begun. K Selvaraju, secretary general of the Southern India Mills\u2019 Association, said buyers have started deferring or holding off on their summer bookings for bed linens and towels \u2013 key products traditionally finalised by October.<\/p>\n
\u201cWe\u2019re hearing \u2018hold on\u2019 from clients who had placed advance enquiries,\u201d Selvaraju said. \u201cIf we miss this window, we miss the season.\u201d<\/p>\n
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Karur alone exports nearly Rs 9,000 crore in home textiles each year, with Rs 6,900 crore going as direct exports. Coimbatore mills send large volumes of cotton towels and kitchen linens to the US \u2013 now burdened with higher duties.<\/p>\n
\u201cThis isn\u2019t just about one tariff hike \u2013 its compounding an already weak environment,\u201d Selvaraju said, pointing to India\u2019s 11% import duty on cotton and a GST duty inversion that further hurts competitiveness. \u201cPolyester raw material is taxed at 18%, yarn at 12%, but finished garments are taxed at 5%. This adds 6-7% to export costs, while competitors don\u2019t have such inverted duties.\u201d<\/p>\n
Meanwhile, the quality of cotton imports from Brazil, which make up 45% of this year\u2019s inbound shipments, is under scrutiny for not always meeting US-mandated standards. Selvaraju has urged the Centre to negotiate a cotton-forward deal, offering duty-free access to US cotton in exchange for apparel exports made from it.<\/p>\n
The global textiles market is highly competitive; India\u2019s key rivals face no such punitive hikes. Bangladesh continues with an effective rate of 35\u201336%, Pakistan has successfully negotiated a 19% tariff, Vietnam is at 20\u201321%, and Cambodia, though previously at 49%, now enjoys a 19% rate after an August 1 revision.<\/p>\n
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By comparison, India\u2019s 50% penalty rate is not only isolated but unprecedented.<\/p>\n
One Tiruppur manufacturer admitted his shipment was lost to Pakistan. \u201cThey seem to have offered a better price,\u201d he said. \u201cThe order slipped.\u201d<\/p>\n
Subramanian reiterated that Bangladesh remains India\u2019s fiercest rival in the US market. \u201cTheir 20% rate means they\u2019re much cheaper, significant when your margin is about 5%.\u201d<\/p>\n
This margin has now all but vanished. With total duties touching 64%, non-branded US buyers are already shifting to cheaper options. \u201cThey shift overnight,\u201d Subramanian warned.<\/p>\n
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Industry leaders are urging for immediate policy relief. \u201cThe government had then provided an extended credit guarantee-linked scheme,\u201d Selvaraju recalled, referring to pandemic-era support. \u201cIt\u2019s time to bring that back.\u201d<\/p>\n
He also pressed for eliminating the 11% cotton import duty and restructuring the GST regime on manmade fibres. \u201cFor our exports to remain viable, tax on all raw materials must be below 5%.\u201d<\/p>\n
If ignored, the consequences will be stark. Indian suppliers could lose permanent ground to Bangladesh, Cambodia as well as Vietnam and Pakistan \u2013 all of whom now enjoy cheaper landed prices in the US. The ripple effect \u2013 order shrinkage, idle capacity, and job losses \u2013 is already underway.<\/p>\n
\u201cThe US market still wants to buy from us,\u201d Selvaraju said. \u201cThey like Indian cotton, the Indian make. But political and policy hurdles are pushing them away.\u201d<\/p>\n
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Ramdas, a mid-sized factory owner in Tiruppur, said the next two to three weeks will be decisive. \u201cWe haven\u2019t seen cancellations yet, but the tone is changing. Everyone\u2019s cautious.\u201d<\/p>\n
Yet, there is cautious hope. Subramanian believes this downturn could still be survived if India moves quickly. \u201cWe got through Covid. We will get through this,\u201d he said. \u201cWe are talking to the Central government. We are urging negotiations with the US.\u201d Some exporters also hope that pressure from big American brands \u2013 worried about higher retail prices \u2013 might eventually force a rethink in Washington.<\/p>\n","protected":false},"excerpt":{"rendered":"IN TIRUPPUR, India\u2019s knitwear capital, exporters are already feeling the heat of the 50 per cent tariff US…\n","protected":false},"author":3,"featured_media":133977,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,3240,69,79,81025,81032,81024,81028,81020,81033,81022,3239,81023,5188,8304,81031,81021,81019,81027,81029,81017,36732,67,132,68,81030,81026,81018],"class_list":{"0":"post-133976","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-current-affairs","10":"tag-donald-trump","11":"tag-economy","12":"tag-india-lowers-tariffs-for-us","13":"tag-india-trade-policy-changes","14":"tag-india-us-economic-relations","15":"tag-india-us-import-export-policy","16":"tag-india-us-tariff-cuts","17":"tag-india-us-tariff-reduction","18":"tag-india-us-trade-agreement","19":"tag-indian-express-news","20":"tag-modi-trump-trade-talks","21":"tag-reciprocal-tariffs","22":"tag-trade-war","23":"tag-trade-war-india-us","24":"tag-trump-india-tariffs-announcement","25":"tag-trump-india-trade-deal","26":"tag-trump-modi-tariff-deal","27":"tag-trump-on-india-tariffs","28":"tag-trump-tariff-impositions","29":"tag-trump-tariffs","30":"tag-united-states","31":"tag-unitedstates","32":"tag-us","33":"tag-us-india-business-ties","34":"tag-us-india-trade-negotiations","35":"tag-us-trade-war"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/133976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=133976"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/133976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/133977"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=133976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=133976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=133976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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