‘America has abandoned us, more or less’: Amid Trump tariffs, cancelled orders put garment exporters in fix

An unexpected fallout from US-India geopolitical tensions has shaken India’s $11 billion textile export industry, particularly in Tiruppur, in the southern state of Tamil Nadu, which is also known as the “knitwear capital” and “Dollar City” for its export earnings.

Following the Trump administration’s imposition of steep tariffs on Indian goods in August, manufacturers who once anticipated that US President Donald Trump would boost business after being elected are now struggling to survive in the market.

Exporters are facing cancelled orders and mounting financial losses, which in turn threaten their livelihood. The situation may worsen if the US buyers of Indian garments turn to other suppliers for low-priced products, reported AFP.

Exporters in a dilemma — losses and stalled shipments

The heavy tariffs, reportedly triggered by Trump’s anger over India’s continued purchases of discounted Russian oil, have dramatically disrupted the supply chain of various Indian goods exported to the US.

Garment exporter RK Sivasubramaniam, who runs Raft Garments factory in southern India, invested heavily in the sector in anticipation of a US-fuelled boom after Trump’s election. Less than a year later, his factory is quieter, work hours are cut, and half a million garments are sitting in towering stacks, ready for shipment but stalled over who will pay the new duties.

US buyers are demanding steep discounts of around 16-20%, which Sivasubramaniam said would result in a “very huge loss”.

To maintain buyer relationships, many, including Sivasubramaniam, are forced to consider shouldering a major portion of the duties just to get paid for goods which are already produced.

N Thirukkumaran, the general secretary of the Tiruppur Exporters Association, confirmed that they have agreed to a short-term 20-25% discount to keep US buyers engaged while hoping for government support.

Decline in US orders

The small industrial town of Tiruppur produced $5 billion in garments last fiscal year, with two-fifths going to the United States. However, the scenario has changed this year as manufacturers painted a grim picture.

The uncertainty has caused a sharp decline in US orders, forcing production halts across Tiruppur’s thousands of manufacturing units.

US orders have largely stopped and around 80% of the US business has reduced,” said Ramesh Jebaraj of Trinity Tex. He produced 100,000 garments in the same season last year but now he has barely made a fifth of that.

This situation has forced manufacturers like him to seek new buyers in other countries such as Israel and the United Arab Emirates, AFP reported.

Alexander John of NC John Garments, which supplies to Walt Disney, called the situation “the worst possible situation any business can be in” and has cut shifts and laid off workers. While he is exploring Europe and Britain to stay afloat, he admits that “none of these markets can replace the US”.

Millions of jobs at risk

Tamil Nadu Chief Minister MK Stalin has warned that up to three million jobs across the state’s textile belt could be at risk, a grim prospect for a country struggling to provide well-paid work for its youth.

The uncertainty is not limited to business owners, as it is deeply felt by workers as well. N Karthick Raja, an employee at a small embroidery unit, fears for his livelihood, stating, “If this job goes away, I don’t know what I will do next. America has abandoned us, more or less.”

Kumar Duraiswamy, CEO of Eastern Global Clothing. summarised the helplessness among his staff: “My tailor… he doesn’t know what is a trade war or why India is buying oil from Russia, and why it is affecting our lives, our bread.”

The fate of the industry and its workers now largely relies on the diplomatic process towards a trade deal that could ease the tariffs.