Tariff effect: Tiruppur stares at factory closures, job losses

Faced with 50% extra duty, US buyers are either cancelling orders or asking for discounts

- SANAL SUDEVAN @Chennai

THE Tiruppur garment industry is staring at an existential crisis, as job losses and shutdowns of factories in the aftermath of US tariffs implementation have started playing out over the past two weeks.

Several exporters have closed their garment-manufacturing units after US buyers either stopped purchases or demanded steep discounts. These exporters, with a strong presence in the US, Europe, and other markets, say some of them rely on the US for nearly 70-100% of their sales.

The US has imposed a 50% tariff on Indian goods effective from 27 August.

A quiet Christmas

With Christmas being the peak season in the US, shipments from Indian exporters usually begin around September—October. Normally, nearly $2 billion worth of goods are exported to the US market alone during this period. But this year, exporters and retailers are being forced to absorb deep cuts in their margins due to the 50% tariff imposed by the US on Indian goods.