Indian apparel exporters warn that sustained US tariffs could cause permanent market share damage and job losses.
Tiruppur textile cluster in Tamil Nadu, which exports nearly Rs 14,000 crore worth of garments annually to the US, is the hardest hit.
The Apparel Export Promotion Council (AEPC) has requested government support due to disruptions caused by US tariffs.
India exported $10.3 billion of textiles and apparel to the US in 2024, representing 8.21% of India’s world exports in 2023-24.
Detailed Insights:
The imposition of 25% tariffs and an additional 25% oil-related penalty by the US is causing severe disruption to India's textile exports.
US buyers are withholding or cancelling new orders due to the risk of mid-cycle tariff escalation, making further tariff absorption commercially impossible.
Market diversification is not a short-term solution, as textile sourcing is embedded in long-term buyer supply chains requiring 2-3 years for alternate market development.
Loss of the US market could lead to permanent customer displacement, benefiting competitors like Bangladesh, Vietnam, and China with preferential access.
Negotiations between Indian apparel manufacturers and US importers have stalled, leading to orders moving to competitors with lower tariffs.
The Indian government has taken steps to aid the sector by easing duty on key raw materials like cotton and addressing MSMEs’ access to input material.
About 90% of the inputs for apparel and textiles are sourced domestically, highlighting the labor-intensive nature and domestic reliance of the sector.
Key Concepts Involved:
Tariffs: Taxes imposed on imported or exported goods.
Market Diversification: Strategy to expand into new markets to reduce reliance on a single market.
MSMEs: Micro, Small, and Medium Enterprises, vital for economic growth and employment.