Tiruppur Exporters Association Addresses Impact of U.S. Tariff on Tirupur Textile Industry
KM Subramanian
The Tiruppur Exporters Association (TEA), led by President Kab Subramanyan, has responded to the recent announcement by U.S. President Donald Trump imposing a 25% import tariff on Indian textiles. As India’s knitwear capital, Tiruppur accounts for 60% of the country’s knitwear exports, with 30-35% of its 40,000 crore export market directed to the United States. In a recent interview, Mr. Subramanyan outlined the potential impacts of the tariff, strategies to mitigate its effects, and the industry’s outlook for the future.
Tiruppur’s textile industry, a vital export cluster, generates approximately 40,000 crores annually, with the U.S. market representing a significant portion. According to Mr. Subramanyan, while the tariff will affect businesses heavily reliant on U.S. buyers, the overall impact is expected to be limited. Only 5-10% of exports, primarily unbranded and basic garments, may face challenges due to price sensitivity. The majority of Tiruppur’s exports, which consist of high-quality, branded fashion garments, benefit from long-term relationships and stringent brand requirements, making it difficult for buyers to shift to competitors immediately. “It would take a minimum of two to three years for buyers to change suppliers due to the complexity of fashion garment manufacturing,” Subramanyan noted.
Global Supply Chain Dynamics and Production Shifts
Despite global supply chain pressures, Mr. Subramanyan reported no significant push from U.S. buyers to relocate production to countries like Indonesia or Vietnam to circumvent the tariff. He emphasized that 90% of Tiruppur’s textile companies are Micro, Small, and Medium Enterprises (MSMEs), which lack the immediate capacity to shift operations overseas. Larger exporters, constituting only 10% of the industry, may consider such moves for profitability, but no immediate plans have been confirmed. “There’s no direct pressure from brands to relocate, as Tiruppur remains a buyer’s market with unique capabilities,” he stated.
Strategies to Stay Competitive
To counter the tariff’s impact, Tiruppur exporters are operating on thin margins and are hesitant to reduce prices further, as this would severely affect profitability. Instead, the TEA plans to seek government support through initiatives such as market incentive schemes, interest subsidies, and enhanced export promotion programs like the Remission of Duties and Taxes on Exported Products (RoDTEP) and Production-Linked Incentive (PLI) schemes. Mr. Subramanyan also highlighted the association’s intent to urge the Indian government to renegotiate with the U.S. to reduce the tariff, emphasizing the need for diplomatic efforts to safeguard the industry.
Long-Term Outlook and Resilience
Looking ahead, Mr. Subramanyan expressed confidence in Tiruppur’s ability to adapt. While MSMEs may face short-term setbacks, the industry aims to offset losses by expanding into markets like the UK and Europe, where free trade agreements (FTAs) are either signed or under negotiation. “The UK FTA is already in place, and strong negotiations with Europe will boost textile exports, compensating for the U.S. tariff impact,” he said. Regarding job losses, Subramanyan reassured that the industry’s 70% non-U.S. business provides a buffer, preventing significant layoffs. However, he noted that the anticipated 15% export growth for this financial year may be deferred to the next.
Commitment to Sustainability and Growth
The Tiruppur Exporters Association remains optimistic about the industry’s resilience and its critical role in India’s global textile supply chain. By leveraging government support, diversifying markets, and maintaining strong relationships with international buyers, Tiruppur aims to navigate the challenges posed by the U.S. tariff while sustaining its position as a global knitwear hub.
