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Credit: TIrupur Exporters Association
Indian apparel exporters out of Tirupur, the country’s textile hub near Chennai, are reporting significant demand pressure because of US tariffs.
The Tirupur cluster, which houses some 2,000 large factories and 20,000 ancillary units with a combined workforce of about one million, is popularly known as the “knitwear capital of India.”
Industry sources in Tirupur said export shipments had slowed considerably following the 50% tariff blow, the steepest level for any country in the region exporting to the US.
“US buyers are pushing for downward price adjustments to offset the higher duty implications,” KM Subramanian, president of Tirupur Exporters’ Association (TEA), told The Loadstar.
“Buyers are pressing for discounts ranging between 10% to 15% on previously agreed prices for shipments to resume,” he noted.
As a result of the uncertainty, the TEA chief expects the Tirupur industry to end the current fiscal year with reduced export turnover, down by no less than $350m.
Mr Subramanian also claimed many exporters had been able to diversify trade to a variety of other overseas markets, and even domestically, thus limiting potential production disruptions and worker layoffs.
But a lack of timely government intervention to address industry pleas seems to have caused some resentment among exporters.
“We were anticipating some government support to neutralise the tariff impact, but any sort of such relief remains elusive,” complained one exporter source.
The US is the largest export destination for Tirupur traders, worth some $1.4bn annually.
India’s overall apparel export trade had been slowing over the past few months, as the full impact of the heightened tariff started to play out.
According to the latest data released by the Apparel Export Promotion Council (AEPC), the country’s ready-made garment (RMG) exports declined 10% in September, after a 2.5% drop in August. The 50% tariff on Indian exports became effective on 27 August.
September data had other tariff linked pointers — India’s overall exports to the US by value for the month also dropped 12% year on year.
“The announcement of 50% reciprocal tariff by the US on Indian imports is a matter of deep concern for India’s textile and apparel industry,” AEPC said. “The United States is one of the largest export destinations, and such a steep tariff will severely impact the competitiveness of Indian products in the American market, hurting both exporters and consumers.”
Amid the export pressure, ocean carriers on the India-US trade have been struggling to fill vessels to their declared capacity levels, forcing them to fire the tactical weapon of blanking calls and abruptly adjusting spot rates, often on a weekly basis, to keep their services profitable.
Additionally, an industry analyst claimed the scale of Indian exports to the US had fallen some 37% over the past five months since the tariff imposition — sequentially dropping from $8.8bn in May to $5.5bn in September.
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