Tamil Nadu’s textile hubs reel as US slaps 50% tariff, exporters fear ‘de facto embargo’

The hum of knitting machines in Tamil Nadu’s textile belt is being drowned out by a gathering economic storm. Just days after US President Donald Trump imposed a sweeping 50% tariff on Indian apparel, exporters from Tiruppur to Karur say orders are freezing, shipments are being diverted to competitors, and margins are vanishing.

For the knitwear capital of Tiruppur, which supplies giants like Walmart, GAP and Costco, the blow is brutal. Effective duties on some garments now touch 64%, making Indian products up to 35% costlier than those from Bangladesh, Pakistan, Vietnam, and Cambodia — all of whom face significantly lower US tariffs.

“What started as a setback now feels like a trade embargo,” said K M Subramanian, president of the Tiruppur Exporters’ Association. “We run on 5–7% margins. This hike wipes that out.”

Optimism turns to anxiety

Until last week, Tamil Nadu’s ₹45,000-crore textile export sector was preparing for a rebound in US orders. The India–UK FTA and high US tariffs on Chinese goods had sparked investment in new machinery and capacity. But that optimism has evaporated.

Exporters say non-branded US buyers — who prioritize price over compliance — are already shifting to cheaper suppliers. In Tiruppur, one long-standing order was abruptly rerouted to Pakistan; in Karur, home textile buyers have put summer orders for bed linen and towels on hold.

“If we miss this booking window, we miss the season,” warned K Selvaraju, secretary general of the Southern India Mills’ Association.

Looming job shock

The textile hubs of Tiruppur, Coimbatore and Karur employ over 1.25 million people. Industry leaders warn that a 10–20% contraction in orders could cost 100,000–200,000 jobs in the coming months.

“This isn’t just one tariff hike,” Selvaraju said. “It’s compounding an already weak environment,” citing India’s 11% import duty on cotton and GST duty inversions that push up costs compared to rivals.

Calls for urgent policy relief

Exporters are demanding an immediate rollback of the 11% cotton import duty, a restructuring of GST on manmade fibres, and revival of pandemic-era credit guarantee schemes. Some also urge the Centre to negotiate duty-free access to US cotton in exchange for apparel exports made from it.

Without intervention, industry leaders fear India could permanently lose US market share to Bangladesh, Vietnam, Cambodia and Pakistan — a shift that would be hard to reverse.

“The US still wants Indian cotton,” Selvaraju said. “But political and policy hurdles are pushing them away.”

For now, exporters are waiting — and hoping — that big US brands, facing higher retail prices, will lobby Washington to ease the blow. “We survived Covid,” Subramanian said. “We can survive this. But the government must move — and fast.”