Crisis in the Indian Textile Industry: The Impact of US Tariffs

Vanaja, a 20-year-old seamstress from Tiruppur, is worried about the future. She works at RRK Cottons and earns 480 rupees a day. In recent weeks, the number of orders has dropped sharply, and many colleagues have lost their jobs.

RRK Cottons Managing Director R. Rajkumar reported that 80% of the company's business is focused on the American market. Two of the five plants have closed in recent months, and staff has been halved. The company has accumulated inventory worth 65 crore rupees and is not receiving payments for recent shipments.

India exports $11 billion worth of textiles and apparel to the USA annually. The western districts of Tamil Nadu (Coimbatore, Tiruppur, Karur) account for about $4 billion of this volume. The largest buyers are Walmart, Target, GAP, and other retail chains.

In the "dollar city" of Tiruppur, manufacturers are facing a sharp decline in orders. R. Gopalakrishnan of Royal Classic Mills halted production after the tariffs were introduced. Buyers are refusing to purchase finished goods due to the high tariffs, suggesting instead that fabrics be sent to Vietnam or Bangladesh for garment manufacturing.

In Karur, a center for home textiles production, the situation is no less difficult. Many of the 800 enterprises are cutting production. P. Gopalakrishnan, head of the local manufacturers' association, estimates direct losses at 1,500 crore rupees.

Exporters are looking for new sales markets, including in Africa and Sri Lanka. Some companies are planning to refocus on producing technical textiles. The authorities are considering the possibility of introducing compensatory measures to support the industry.

Industry representatives are urging the government to accelerate negotiations with the US on reducing tariffs and to intensify the development of other export directions, particularly the European market. However, European buyers have also started demanding price reductions, worsening the situation for Indian manufacturers.

The crisis affects not only direct factory workers but also thousands of people employed in related industries—from yarn suppliers to packers. Many enterprises are forced to reduce working hours and staff, leading to decreased family incomes.

Representatives from over 25 textile associations met with the Finance Minister and presented their demands. They insist on introducing temporary support and revising the Focus Market scheme. The government is working on a support package, but the situation requires urgent solutions.

Some companies are considering the possibility of expanding their presence in the e-commerce market and developing cooperation with African countries. However, these steps require time and careful planning.