Tiruppur, a town in western Tamil Nadu also known as India’s knitwear capital, faces a clouded future as new US tariffs risk disrupting its export-driven economy. Nearly 40% of the town’s garment shipments go to the US, and a fresh 25% duty hike has exporters fearing losses of several thousand crores, possible factory shutdowns, and large-scale job cuts.The industrial town accounts for nearly 68% of India’s total knitwear exports, generating an export turnover of ₹44,747 crore in FY25 and employing nearly one million workers. The town is the backbone of India’s apparel exports, catering to global majors such as GAP and Walmart. But with the US imposing an additional 25% tariff scheduled to kick in from August 27, exporters say the business model has been pushed beyond survival limits.“Each order cycle is about 120 days. One cycle of orders worth nearly ₹4,000 crore has already been hit,” K.M. Subramaniam, President of Tiruppur Exporters Association (TEA), told CNBC-TV18.
The US market contributes nearly ₹12,000 crore annually to Tiruppur’s exports, and the immediate blow is already visible, he added.Cost Pressures MountingExporters are now facing an impossible choice: Either absorb the costs themselves or pass them on to US buyers, who may look elsewhere. “When the first 25% tariff was announced, we were already 5–6% costlier than competing neighbouring countries like Vietnam and Bangladesh. We could still manage because of longstanding client relationships. But with the second 25%, it is simply not viable. Neither exporters nor importers can absorb this shock,” said Kumar Duraisamy, Joint Secretary, TEA.The ripple effects extend beyond balance sheets. The knitwear hub has about 2,500 exporters and 20,000 standalone factories, with an ecosystem spanning knitting, dyeing, packaging, labelling, and sewing. Exporters warn that 1–1.5 lakh jobs could be lost if orders dry up. “Some units may survive by finding alternate buyers, but for many—especially those supplying exclusively to the US—this could be the end,” Duraisamy noted.Also read: US tariffs push Indian textiles into cost disadvantage; market share at risk: Elara CapitalBut he is quick to add that the garment hub has been facing a shortage of labour, and that a part of the jobs lost can be absorbed by other units, especially those not dependent on the US as a market.Adding to the pain, exporters work on razor-thin margins due to intense global competition. Core items like undergarments and baby suits are produced year-round, while seasonal and fast-fashion items are supplied directly to big retailers. A sudden hike in tariffs makes these contracts unviable.Exporters are exploring the UK, EU, and Australia as alternative destinations. The recently signed UK free trade agreement (FTA) and the expected EU FTA offer some hope. But these markets, they say, cannot compensate for the sheer scale of the US orders. “No other market can replace the quantities that the US absorbs. Even if we find new buyers, smaller and mid-sized units will take 6–12 months to reach the same momentum, but their fixed costs remain the same,” Duraisamy said, adding that only those who can absorb these costs will be able to survive.At the same time, Subramaniam struck a note of cautious optimism. Tiruppur, he pointed out, offers specialised fashion and knitwear manufacturing that few global hubs can replicate. “For fashion, they have to come here. This is not an ecosystem that can be built overnight. That’s why I believe the disruption could be short-lived,” he said.For now, nearly ₹2,000–₹3,000 crore worth of shipments are stuck in the pipeline, awaiting negotiations with importers.Plea for government supportThe exporters are seeking urgent relief. Representatives from TEA have already met Tamil Nadu Chief Minister M.K. Stalin, who recently wrote to the Centre pressing for support to protect Tiruppur’s economy. Stalin has urged the Union government to provide an assistance package, including interest subvention and moratoriums, on the lines of what Brazil extended to its exporters.Exporters are calling for a two-year moratorium on loan repayments, a 20–30% increase in credit limits, and subsidies to keep factories running. They are also requesting rating agencies not to downgrade affected companies, which would make access to credit even harder.These textile merchants are hoping that the Centre steps in with a relief package. Otherwise, they are worried this could turn into a livelihood crisis for a hub that only recently recovered from shocks of demonetisation, GST and the COVID-19 pandemic.For now, India’s knitwear capital waits anxiously — caught between global trade headwinds and the hope of swift policy support to keep its looms running.Also read: India’s GDP could slip below 6% if 50% US tariffs continue: Goldman Sachs economist
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