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

India’s knitwear export hub Tiruppur is once again in the spotlight after US President Donald Trump imposed a 25 per cent tariff on Indian exports. With the US being a key buyer of fashion garments from the region, the move has sent ripples through the industry. In this interview, The Federal speaks to K M Subramanian, President of the Tiruppur Exporters’ Association, about the immediate fallout and the road ahead for exporters — especially the MSMEs that form the backbone of Tiruppur’s economy.

What share of your exports goes to the US, and how has the 25 per cent tariff affected current orders or buyer confidence? Have you seen any cancellations or delays?

Tiruppur is a specialised export cluster for knitwear, contributing Rs 40,000 crore annually. Of that, 30-35 per cent of business is with the US. This second tariff announcement by President Donald Trump will certainly affect us, but mainly companies solely dependent on the US. The remaining 70 per cent of our exports go to other markets, which helps balance the impact.

Also read: As Trump’s tariffs threaten WTO, can India play a role in restoring order?

Can long-term buyer relationships and high-quality products help retain US clients? Or is cost the main concern now?

US buyers won't shift so easily because Tiruppur doesn’t just make basic garments — we manufacture fashion garments for global brands. These brands have rigorous specifications, factory audits, and compliance requirements. Shifting such supply chains takes at least two to three years. Only the basic, unbranded garments — 5-10 per cent of US-bound exports — may shift due to price. The rest will remain with Tiruppur.

Also read: Trump tariff shocker leaves Indian stocks, exporters scrambling

Are US buyers pressuring you to move production to other countries like Vietnam or Indonesia to avoid the tariff?

So far, there’s been no such pressure from buyers. While large exporters might explore that option for profitability, 90 per cent of Tiruppur companies are MSMEs — they don’t have the capacity to relocate. Only a small number of larger firms may consider this, and even then, not immediately.

With the tariff increasing overall costs, is there any room to reduce prices to stay competitive in the US market?

We already operate on very thin margins. In a buyer-driven market, the buyers will always demand lower prices, but we simply cannot accommodate that without support. That’s why we are requesting government support — through schemes like the Market Assistance Incentive Scheme, Focus Market Scheme, and interest subsidies — via the Apparel Export Promotion Council and other industry bodies.

Do schemes like RoDTEP and PLI help mitigate the tariff impact? What more should the government do in this situation?

These schemes offer some relief, but not enough to offset the full impact of the 25 per cent tariff. We are asking the government to renegotiate with the US to reduce the tariff itself. If that doesn’t happen, we’ll continue seeking stronger domestic support to help exporters stay competitive.

What long-term effects do you foresee from this tariff — especially for MSMEs in Tiruppur in terms of job losses and sustainability?

Large exporters won’t be badly affected, but MSMEs may face a temporary setback. However, with 70 per cent of our exports going to non-US markets, we expect to manage the disruption. Recent developments like the UK FTA and ongoing talks for an EU FTA will help boost textile exports and offset the losses. We’re confident the US will reconsider, and the Indian government must continue to engage strongly with them.

Given that 90 per cent of Tiruppur’s exporters are MSMEs, could this tariff result in job losses or businesses shutting down?

No, not likely. As I said, we have enough business from other markets to compensate. US exports account for only 30 per cent, and that too not all of it will be hit. While we initially projected a 15 per cent export growth this year, that may now get pushed to the next financial year. But we’re optimistic.

(The content above has been generated using a fine-tuned AI model. To ensure accuracy, quality, and editorial integrity, we employ a Human-In-The-Loop (HITL) process. While AI assists in creating the initial draft, our experienced editorial team carefully reviews, edits, and refines the content before publication. At The Federal, we combine the efficiency of AI with the expertise of human editors to deliver reliable and insightful journalism.)