Why India must take Brazil’s lead to save Tiruppur from impact of Trump’s tariffs

Tamil Nadu’s textile hub, Tiruppur, is facing severe pressure after the United States imposed a 50 per cent tariff on imports from India. With Rs 15,000 crore worth of knitwear exports going to the US annually, thousands of jobs and the state’s industrial backbone are under threat. In this interview with The Federal, Thirukkumaran N, general secretary of the Tiruppur Exporters Association, explains the immediate fallout, the industry’s demands from the government, and the road ahead.

What will be the immediate impact of the US tariff hike on Tiruppur’s exports?

Tiruppur exports goods worth Rs 45,000 crore annually, of which Rs 15,000 crore—about 35 per cent—goes to the US. Nearly 60–70 per cent of our companies have some exposure to the American market.

The immediate impact is severe. Orders worth Rs 3,000 crore have been put on hold. In apparel, the order cycle runs 60-90 days, so this halt translates into nearly two months of lost production. For exporters, this is a critical situation.

Also read: Trump’s tariff hits Indian textiles: Tiruppur exporters under pressure

The chief minister has sought relief and structural reforms. What specific measures are you asking from the Union government?

India and Brazil have been hit the hardest with a 50 per cent tariff. Brazil responded with a $5.7 billion support package for its exporters. We expect similar handholding from New Delhi.

First, credit must be made easily available to MSMEs, which make up 90 per cent of Tiruppur’s industry. A scheme similar to the Emergency Credit Guarantee scheme during COVID should be revived. Second, there must be a moratorium on loans, since many exporters took loans this year to expand capacity after importers gave positive signals due to the “China plus one” strategy and instability in Bangladesh.

We are also demanding:

Restoration of the 5 per cent interest subvention that was withdrawn last year

An increase in ROSCTL (rebate on state and central taxes) from 4.2 per cent to 8-10 per cent

An increase in duty drawback from 2.3-2.4 per cent to at least 5 per cent

These measures are essential for survival.

If the US market is so critical, can other destinations substitute for it?

It is nearly impossible to replace the US in the short term. Tiruppur exports Rs 15,000 crore to the US and about Rs 13,000-14,000 crore to the entire 27-nation European Union. No other market can absorb that kind of volume.

In the long term, we must diversify. Fast-tracking the free trade agreement (FTA) with the European Union is critical, since competitors like Bangladesh and Vietnam already enjoy zero-duty access there. We also need more FTAs with GCC nations beyond UAE and Oman.

Also read: Stock market slumps in early trade as 50 pc US tariff dents investor sentiment

The Union government has identified 40 potential markets for expansion. But this is a long-term exercise. In the immediate term, relief from the government is the only way to avoid a crisis.

Do you see Trump’s tariff policy as targeting India directly?

Donald Trump’s stance changes often. Recently he has gone softer on China because of their leverage in rare earth minerals and key supply chains. India is an easier target because we rely heavily on diplomacy and do not retaliate.

Brazil too has been hit, though his reasons there may be personal. Ultimately, this is about the US trying to dictate terms and secure supply chains in its own favour.

Tiruppur accounts for nearly 90 per cent of India’s cotton knitwear exports. How are you preparing for the global shift towards man-made fibers and technical textiles?

Man-made fibers are the future, with 60 per cent of global consumption already in that category. Tiruppur is focused on this transition. But India is weak in processing synthetic fibers, so we are seeking investments, especially from Taiwan.

We recently hosted a summit in Coimbatore where Taiwanese entrepreneurs engaged with our exporters. To compete globally, we need a dedicated technology upgradation fund for MSMEs, since man-made fiber processing requires new machinery.

Already, we have seen a 10 per cent increase in man-made fiber production in Tiruppur last year.

Also read: PM Modi rejected four calls from Trump: Report

The industry employs over six lakh workers directly, two-thirds of them women. How will the tariff hike affect livelihoods?

The real impact will be clear in the next three to four weeks. Orders are being renegotiated, with US buyers asking for steep discounts that MSMEs cannot absorb. If relief is not provided, layoffs will become inevitable.

The chief minister is right to warn of job losses. Tiruppur is an ecosystem—women workers, microfinance loans, children’s education, and small ancillary industries all depend on it. If the crisis persists, the ripple effects across Tamil Nadu’s economy will be significant.

Beyond trade, Tiruppur is also known for sustainability initiatives. Can you explain your green measures?

Tiruppur is the only textile cluster in the world that operates as an environmentally and socially governed cluster.

We recycle 130 million litres of water every day, reusing 96 per cent—almost half of Tamil Nadu’s daily domestic water consumption.

We generate 1,950 MW of renewable energy through solar and wind, while consuming only 350 MW as a cluster. The rest is supplied to the state grid.

We have planted 2.2 million trees with a survival rate of 90 per cent.

Also read: US tariff shock to hit Bengal’s labour-intensive leather, marine, engineering exports

We have restored 10-12 lakes, including Nanjirai Lake, which was declared Tamil Nadu’s 17th bird sanctuary in 2022.

In addition, many exporters adopt government schools, build hospitals, and run primary health centres. An Rs 80-crore cancer hospital is being built in Tiruppur’s government medical facility. Caring for the environment and society is part of the Kongu region’s ethos.

Any closing thoughts on the tariff crisis?

We remain hopeful of an agreement with the US. But if the dispute drags on, the Union government must support vulnerable sectors like textiles, gems and jewellery, and footwear. Without urgent relief, industries in Tamil Nadu—including Tiruppur and Vellore—will face irreversible damage.

Also read: Trump’s 50 pc tariff on Indian goods takes effect as US doubles import duties

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