Tariffs weigh on Indian garment exporters

When Donald Trump was elected, Indian garment exporter R.K. Sivasubramaniam thought the new US president would boost business and invested heavily in anticipation of a boom.

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Employees work at a garment factory in Tiruppur, in India's southern state of Tamil Nadu. Trump's 50 per cent tariffs on Indian goods have upset the country's $11 billion textile export industry. - AFP

(AFP)

But less than a year later, everything is “upside down”, he admits with a pained smile.

Trump’s 50 per cent tariffs on Indian goods, imposed in August, have upset the country’s $11 billion textile export industry and shaken confidence in the US market.

Sivasubramaniam’s Raft Garments factory in southern India, normally frenetic with humming sewing machines, is quieter and work hours have been cut, hitting employees’ paypackets. If his US buyers turn to other suppliers, half his business could vanish.

Meanwhile, half a million garments sit in towering stacks, ready for shipment but stalled over who will pay the new duties.

Buyers are asking for a 16-20 per cent discount.

“We cannot give that much,” said Sivasubramaniam, whose desk carries crossed US and Indian flags. “It’s a very huge loss for us.”

If Raft doesn’t shoulder part of the duties, it won’t be paid for garments already produced -- leaving it unable to cover costs.

“If it continues for another month... we cannot give work to our employees,” he warned.