<p>Chennai: Nearly two months after the US imposed 50% tariffs on Indian imports, the knitwear hub of Tiruppur in Tamil Nadu is struggling, as goods worth between Rs 1,500 crore and Rs 2,000 crore remain stuck in factories, ports, and warehouses.</p><p>Cash flow has dried up, fresh orders from American buyers have stopped, and many factories, especially those in the MSME category, fear they might have to scale down production, which could result in layoffs if the situation does not improve in the next 2-3 months.</p><p>Exporters who deal exclusively with the US market are the worst-affected, with buyers seeking steep discounts of 20-25% for finished goods. </p><p>While financially sound companies have been able to negotiate and bear the losses to an extent, those in the MSME sector continue to suffer, as agreeing to such high discounts would only worsen their losses. The US accounts for 30% of knitwear exports from Tiruppur.</p><p>Though some companies have already slowed production leading to layoffs at a small scale, but the perennial labour shortage in the knitwear hub has helped them find work at other factories that are running at full or near-full capacity. However, the situation may not be the same when lakhs of migrant labourers return from their holidays after the festival season and Bihar elections, as companies might not be able to provide jobs for them.</p><p>“When the tariffs were announced, exporters here were hopeful that the situation would ease in two months. However, we are in a crisis. Goods worth between Rs 1,500 crore and Rs 2,000 crore are stuck at ports, factories, and warehouses due to the tariffs imposed by the US,” K M Subramanian, President of the Tiruppur Exporters Association (TEA), told DH.</p>.<p>He said that since there has been no inflow of orders from the US after the high tariffs were imposed, companies might be forced to slow down production in December or January 2026 if both the Indian and US governments don’t arrive at a solution. “Tiruppur has a perennial shortage of about 1.5 lakh labourers, and many of those who have been relieved by some factories have found jobs in other units. For now, the layoffs are not significant. But three months down the line, the crisis might get worse if the higher tariffs persist,” he added.</p>.Trump says India will continue paying 'massive' tariffs if Russian oil purchase not restricted.<p>Kumar Duraiswamy, Joint Secretary of TEA, said the situation varies from one exporter to another, as things depend on the financial and risk-taking capabilities of each. “I deal with five US buyers, and I was able to negotiate and ship goods to two of them, as they too were willing to take risks like me because of their sound financial condition. But the other three were not willing to take risks, and I am playing it safe with them,” he added.</p>.<p>Duraiswamy also warned that layoffs would be inevitable if the issue is not resolved in the coming months. “We want both governments to sit and resolve the issue in the best interests of both countries,” he added.</p>.<p>Both Subramanian and Duraiswamy expressed disappointment that the Union Government has not come forward to help the knitwear hub minimise its losses. “The government should bring back the Emergency Credit Line Guarantee Scheme, help secure working capital, and increase the NPA period from 90 days to 180 days, besides reducing interest rates. It is unfortunate that no help has come from the government,” Subramanian added.</p>.<p>However, the crisis has also opened up opportunities for exporters, who are now exploring markets like Russia, Saudi Arabia, the UAE, Iceland, Liechtenstein, Norway, Switzerland, and the United Kingdom, with which India recently signed a Free Trade Agreement (FTA). But signing new deals with buyers in these countries could take at least six months to a year due to the long-drawn process of finalising agreements and designs.</p>.<p>Duraiswamy said exporters are now scouting for buyers in categories they specialise in across other markets, and are also venturing into new areas like man-made fibres, which could help offset the losses incurred due to US tariffs, even if the current situation continues.</p>.<p>“We now have inquiries from Saudi Arabia, and even Russia. Our players had stopped exporting to the Russian market due to language and climatic barriers, but are now seriously reconsidering. Some exporters have already visited Russia to meet potential buyers,” he said.</p>
<p>Chennai: Nearly two months after the US imposed 50% tariffs on Indian imports, the knitwear hub of Tiruppur in Tamil Nadu is struggling, as goods worth between Rs 1,500 crore and Rs 2,000 crore remain stuck in factories, ports, and warehouses.</p><p>Cash flow has dried up, fresh orders from American buyers have stopped, and many factories, especially those in the MSME category, fear they might have to scale down production, which could result in layoffs if the situation does not improve in the next 2-3 months.</p><p>Exporters who deal exclusively with the US market are the worst-affected, with buyers seeking steep discounts of 20-25% for finished goods. </p><p>While financially sound companies have been able to negotiate and bear the losses to an extent, those in the MSME sector continue to suffer, as agreeing to such high discounts would only worsen their losses. The US accounts for 30% of knitwear exports from Tiruppur.</p><p>Though some companies have already slowed production leading to layoffs at a small scale, but the perennial labour shortage in the knitwear hub has helped them find work at other factories that are running at full or near-full capacity. However, the situation may not be the same when lakhs of migrant labourers return from their holidays after the festival season and Bihar elections, as companies might not be able to provide jobs for them.</p><p>“When the tariffs were announced, exporters here were hopeful that the situation would ease in two months. However, we are in a crisis. Goods worth between Rs 1,500 crore and Rs 2,000 crore are stuck at ports, factories, and warehouses due to the tariffs imposed by the US,” K M Subramanian, President of the Tiruppur Exporters Association (TEA), told DH.</p>.<p>He said that since there has been no inflow of orders from the US after the high tariffs were imposed, companies might be forced to slow down production in December or January 2026 if both the Indian and US governments don’t arrive at a solution. “Tiruppur has a perennial shortage of about 1.5 lakh labourers, and many of those who have been relieved by some factories have found jobs in other units. For now, the layoffs are not significant. But three months down the line, the crisis might get worse if the higher tariffs persist,” he added.</p>.Trump says India will continue paying 'massive' tariffs if Russian oil purchase not restricted.<p>Kumar Duraiswamy, Joint Secretary of TEA, said the situation varies from one exporter to another, as things depend on the financial and risk-taking capabilities of each. “I deal with five US buyers, and I was able to negotiate and ship goods to two of them, as they too were willing to take risks like me because of their sound financial condition. But the other three were not willing to take risks, and I am playing it safe with them,” he added.</p>.<p>Duraiswamy also warned that layoffs would be inevitable if the issue is not resolved in the coming months. “We want both governments to sit and resolve the issue in the best interests of both countries,” he added.</p>.<p>Both Subramanian and Duraiswamy expressed disappointment that the Union Government has not come forward to help the knitwear hub minimise its losses. “The government should bring back the Emergency Credit Line Guarantee Scheme, help secure working capital, and increase the NPA period from 90 days to 180 days, besides reducing interest rates. It is unfortunate that no help has come from the government,” Subramanian added.</p>.<p>However, the crisis has also opened up opportunities for exporters, who are now exploring markets like Russia, Saudi Arabia, the UAE, Iceland, Liechtenstein, Norway, Switzerland, and the United Kingdom, with which India recently signed a Free Trade Agreement (FTA). But signing new deals with buyers in these countries could take at least six months to a year due to the long-drawn process of finalising agreements and designs.</p>.<p>Duraiswamy said exporters are now scouting for buyers in categories they specialise in across other markets, and are also venturing into new areas like man-made fibres, which could help offset the losses incurred due to US tariffs, even if the current situation continues.</p>.<p>“We now have inquiries from Saudi Arabia, and even Russia. Our players had stopped exporting to the Russian market due to language and climatic barriers, but are now seriously reconsidering. Some exporters have already visited Russia to meet potential buyers,” he said.</p>