An unusual quiet has settled over garment factories in Tiruppur, one of India’s largest textile export centers.
Only a fraction of the 200 sewing machines at N Krishnamurthy’s unit are running, completing the last batch of children’s garments bound for major US retailers. New fabric samples lie untouched, with buyers pausing orders following the introduction of 50% tariffs on Indian goods by the United States.
India is a significant exporter of textiles, seafood, and gems to the US. Industry experts warn that steep tariffs will reduce competitiveness and disrupt long-standing supply relationships.
In Tiruppur—which accounts for nearly a third of India’s $16 billion in ready-made garment exports to companies like Target, Walmart, Gap, and Zara—factory owners say the slowdown has already forced them to delay expansion and hold back new hires.
“The timing is difficult. September to December is our busiest season. Without orders, we may not sustain operations,” Krishnamurthy said.
Some factories now face unsold inventory worth millions of dollars, while others are shifting focus to India’s domestic market during the upcoming Diwali season.
At current tariff levels, an Indian-made shirt priced at $10 would cost US buyers $16.4, compared to lower rates from Bangladesh, Vietnam, and China. Even if duties are reduced, analysts say Indian exports will remain less competitive than those of its Asian peers.
The government has announced relief measures such as suspending import duties on certain raw materials and intensifying trade talks with other countries. However, businesses worry these efforts may not offset the immediate impact.
Diamond and jewellery exporters are also under pressure. Mumbai’s jewellery hubs, which send billions of dollars’ worth of goods to the US in September and October, face uncertainty. With margins as low as 3-4%, even small tariff increases are difficult for exporters to absorb.
In Surat, India’s diamond-cutting capital, units that once employed hundreds of workers now run at reduced capacity, with many contract employees placed on indefinite leave.
Shrimp exporters, another sector heavily reliant on US demand, also report declining orders. Farmers and hatcheries say production has been scaled back significantly as higher tariffs drive prices downward. The industry warns that millions of livelihoods linked to aquaculture could be affected.
Trade analysts predict that US buyers may divert more orders to other sourcing countries. “The shift in sourcing is inevitable. Indian businesses will need to diversify markets and strengthen domestic resilience,” said Ajay Srivastava of the Global Trade Research Initiative.
For now, uncertainty looms across India’s export hubs as stakeholders await clarity on trade negotiations.
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