Image for representational purposes.
Credit: DH Photo/PUSHKAR V
Chennai: Exporters in Tiruppur are optimistic after US tariffs on Indian imports fell to 18 per cent, expecting US buyers to clear Rs 4,000 crore worth of goods held up for the past four months. The knitwear hub, which accounts for 55 per cent of Indian exports, anticipates a surge in orders, gaining a competitive edge over rivals like Vietnam and Bangladesh facing higher tariffs.
The exporters are elated that the announcement of lower US tariff comes just a week after India and the EU concluded the FTA, which will further open the key market to players from Tiruppur. EU and US markets alone account for about 60 per cent of knitwear exports from Tiruppur.
The Southern India Mills Association (SIMA) said the reduction of the tariff to 18 per cent would significantly enhance global competitiveness of Indian textile exports and restore confidence across the industry.
SIMA chairman Durai Palanisamy said the India-US trade deal and the FTA with Europe are expected to trigger a significant surge in demand, strengthen export momentum and place the country on a higher and more sustainable growth trajectory.
Tiruppur Exporters’ Association (TEA) president KM Subramanian told DH that the exporters disposed of goods worth Rs 3,000 crore in the past four months by offering 15-30 per cent discounts to the buyers.
“The trade deal augurs well for the apparel industry. We hope to increase our exports to the US and the EU in the coming months,” Subramanian said.
“Only low-priced garments like polo t-shirts, round-neck t-shirts, and others got stuck in godowns. The value of these goods would be between Rs 3,000 crore and Rs 4,000 crore. With the tariffs coming down, we don’t think the buyers will have a problem in taking them,” he added.
The exporters say the knitwear hub might have lost Rs 2,000 crore as fresh orders were not forthcoming, but express hope that they will be able to compensate the loss in coming months. India has a competitive edge since its competing countries are at higher tariffs, with Indonesia at 19 per cent, Vietnam (20 per cent), Bangladesh (20 per cent), and China (34 per cent).