Trump tariff turbulence: Tiruppur knitwear lifeline stretched thin

Business Standard

10 hours ago

The clatter of knitting machines is the pulse of Tiruppur, each metallic click and hum carrying the livelihoods of nearly 1.2 million people, directly or indirectly tied to the textile and apparel trade. The faintly sweet scent of cotton in the air, sometimes replaced by the pungent tang from dyeing units, is as much a part of daily life as the morning tea.
But lately, the streets wear a different mood. The industry's outward resilience masks an undercurrent of unease. In this corner of Tamil Nadu, more than 12,500 kilometres from the Oval Office, the trade moves in Washington are sending tremors through shop floors. Relatively high 50 per cent US tariffs on Indian goods threaten orders, revenues, and hundreds of thousands of jobs.
'Tiruppur is like a phoenix — we will rise from the ashes,' say exporters in almost unison.
It is a familiar refrain in a town that has survived crises before: The closure of dyeing units in 2010–11, the GST blues of 2017, the Covid-led collapse of 2019, raw material shortages, wars. 'Even if we lose 50 per cent of our US revenue, that's about ₹6,000 crore. With trade deals with the European Union and the United Kingdom, we can replace it,' says K M Subramanian, president of the Tiruppur Exporters' Association and promoter of KM Knitwear, as devotional chants of Om Namah Shivaya play softly in his office, giving a sense of clam.
But that calm confidence isn't infectious: Many believe the next six months will decide survival — if the 50 per cent tariff stays.
Tiruppur, the knitwear capital of India, along with nearby Coimbatore, accounted for 69 per cent, or around ₹44,747 crore, of India's total knitwear exports worth ₹65,178 crore in 2024-25. Of that, the US market, based on industry estimates, claimed over ₹13,000 crore. Now, with the Donald Trump administration's higher tariff move, exporters expect US shipments to halve, crippling a sector where more than 80 per cent of companies are the micro, small, and medium enterprises (MSMEs) with an annual revenue of less than ₹100 crore.
Hence, one could see two worlds in one city: One where companies are holding their breath for an 'Indian trump card' to solve the tariff war; the other betting on diversification and the new openings in the EU and UK.
Inside the modest, paint-peeling office of the Tiruppur Exporters and Manufacturers Association (Teama), president M Muthurathinam voices the bleaker view. 'There are MSMEs that are 100 per cent dependent on the US. They will be wiped out. Diversion of orders will take six months to a year; we need incentives to survive,' he says. Teama's membership, comprising mostly small companies with less than ₹10 crore turnover, has fallen from 1,200 before Covid to around 700 now.
Retail giants -- Walmart, Target, Amazon, TJX, Kohl's, Gap, H&M -- have told Indian suppliers to pause shipments until tariff details are clear. 'We're seeing not just holding of orders but also cancellations. One of my US customers, too, has dropped orders for summer 2026,' says N Thirukkumaran, chairman of Esstee Exports India.
Around 700,000 people depend directly on the sector here, and another half-million indirectly, including 300,000 migrant workers from Odisha, Uttar Pradesh, West Bengal, Jharkhand, and Bihar. Industry groups are pushing for a special jobs package.
For US brands, too, relocating sourcing isn't easy. Bangladesh and Vietnam can't instantly absorb large orders. 'Tiruppur works on wafer-thin margins,' says R Senthil Kumar of Premier Agencies. They are around 5 per cent in the US market, versus up to 25 per cent in Europe, according to Teama.
Subramanian notes that brands have long-established supply chains here. 'Shifting will disrupt sourcing from Japan, Vietnam, and elsewhere. US customers will end up paying more.'
For some, the damage has already been done. G R Senthilvel of Polo Castle shut his unit and sold ancestral property to clear ₹2.25 crore in debt after years of setbacks -- demonetisation, introduction of GST, rising costs, and global slowdown. 'We need an immediate package from the government, support from the banking sector, and handholding to find new markets like the EU, UK, or even Africa,' says Senthilvel.
Africa, many agree, offers promise but comes with banking risks, outside of South Africa and a few others. MSMEs need a one-year breathing space with packages, tax breaks, and relaxed banking rules, demands Senthil Kumar of JM Knits and Weaves. 'Without six months' stability, we won't survive.'
Some have sidestepped the storm by focusing inward. S Sathasivam's Horse Club unit thrives in the domestic market, which brought in about ₹35,000 crore last financial year. But even here, cotton price hikes are pushing a shift to polyester. 'It's a huge crisis for hubs like Tiruppur. We need price control on raw materials,' he says.
As the road out of town grows quieter, the rhythmic thump of knitting machines fades, but the 1.2 million heartbeats they power seem to echo in unison: 'Tiruppur needs a stitch in time'.