US tariffs spark concern in India's textile capital

Tiruppur, India - The roar of sewing machines has given way to an unusual quiet in the textile factories of Tiruppur, in southeastern India. Since the tariffs on Indian exports was imposed by Donald Trump at the end of August, most have been operating at a reduced capacity.

“US orders are almost at a standstill,” notes a disappointed Ramesh Jebaraj. His company, Trinity Tex, has seen its business with the US fall by around 80 percent.

In retaliation for India's purchases of Russian oil, which he claims finances Moscow's war in Ukraine, the White House incumbent has decreed a 50 percent increase in customs duties on Indian products entering US soil. His decision at the end of the summer sent shockwaves through the Indian textile industry, which exports 11 billion dollars worth of various products each year.

This is particularly true in the city of Tiruppur, nicknamed “Dollar City” due to its strong ties to the US. During the last fiscal year, “India's knitwear factory” produced five billion dollars worth of clothing, with 40 percent destined for the US. Local businesses were hit hard as soon as the tariff was implemented.

“All businesses in Tiruppur are affected,” states Jebaraj, and “some large factories are preparing to close units.” “It's worse than during the Covid-19 pandemic,” adds Alexander John of NC John, which produces for entertainment giant Walt Disney. “Nothing can replace the US and the purchasing power of its 350 million inhabitants.”

"No more work"

The executive has already laid off some of his employees and is fighting to find new markets in the UK and the rest of Europe. Across the sector, the end of the “American dream” is coming at a high price. It is particularly costly for R.K. Sivasubramaniam, managing director of Raft Garments. He invested heavily after Donald Trump's election, betting on an increase in bilateral trade.

Customers are asking for discounts of 16 to 20 percent, “but we can't give them that much,” he laments, standing in front of boxes of unsold goods piling up in his warehouses. “If this continues for another month, we will have no more work to offer them,” worries Sivasubramaniam, gesturing towards his workers.

The chief executive of Tamil Nadu, M.K. Stalin, has estimated that up to three million jobs are at risk in the state's textile industry. Industry trade associations claim that, so far, they have managed to avoid mass redundancies by agreeing to significant discounts on their exports.

“We are offering customers discounts ranging from 20 to 25 percent,” explains N. Thirukumaran, general secretary of the Tiruppur Exporters' Association. “Some manufacturers have even chosen to sell at a loss to maintain their relationships with US buyers while awaiting a potential bilateral trade agreement,” he adds.

Without swift financial support from the government, however, they will not be able to hold on. In the vast, dimly lit workshops of RRK Cotton in Palladam, 17 kilometres from Tiruppur, the sewing machines have already fallen silent.

"Abandoned..."

R. Rajkumar, a former tailor who founded his company 30 years ago, has temporarily closed two of his three factories and placed some staff on temporary leave.

“This is a situation that no one could have anticipated,” states Rajkumar. To pay his suppliers, he has also opted for discounts and continues to supply his US clients. He fears, however, that they will quickly turn to competitors in Vietnam or Bangladesh. Like others, the business owner has started exploring European markets, but without much hope. “None of these markets can replace the US,” he admits.

Throughout the workshops of Tiruppur, business owners and workers are angry, held hostage by a geopolitical situation beyond their control. “My tailor has no idea what a trade war is,” grumbles Kumar Duraiswamy, the CEO of Eastern Global Clothing. “He doesn't know why India is buying oil from Russia, or how that can turn our lives upside down.”

“We are helpless, lost,” the boss continues, “we don't know if the government will support us or if it is waiting for a potential trade agreement.”

In her embroidery workshop, forced to operate at a reduced capacity, N. Karthick Raja is just as distraught. “We are being forced to take one or two days of unpaid leave. If I lose my job, I don't know what I'll do,” worries the 30-year-old, “it feels like America has abandoned us...”

This article was translated to English using an AI tool.

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