Archive · 11 Dec 2025
Tiruppur Faces Credit Squeeze Amid US Tariffs
Tiruppur, a big city in Tamil Nadu known for making clothes, is having money problems.
The US put high taxes on clothes from India, which makes it harder for Tiruppur to sell there.
Because of this, banks and other lenders are being more careful about giving loans.
They are checking people's incomes more strictly and have stopped giving loans to workers who move to Tiruppur from other places.
Even though some people lost jobs, most are finding new ones quickly.
The city makes a lot of clothes, and many of them are sold to other countries.
Now, the people who make clothes are trying to sell to different countries to make up for the loss from the US taxes.
Banks and NBFCs in Tiruppur are tightening credit due to financial strain from 50% US tariffs on textiles.
Lenders are now considering only 75% of cash salary and 50% of taxable income for FOIR calculations.
Disbursements to migrant workers have been temporarily halted, affecting 60% of the workforce.
Tiruppur's textile exports to the US, worth ₹15,000 crore, are being impacted, leading to job losses and market pivots.
Exporters are shifting to markets like France, Italy, and Spain, or routing shipments through Vietnam and the UAE.
- Who
- Banks, NBFCs, and small finance banks in Tiruppur, Tamil Nadu
- What
- Credit tightening and reassessment of incomes due to financial strain from US tariffs
- When
- As of September 2025, with expected impact in the second half of FY26
- Where
- Tiruppur, Tamil Nadu, India
- Why
- To mitigate risks from reduced export volumes and squeezed margins due to 50% US tariffs
- Outstanding Bank Credit
- ₹67,900 crore
- Textile Production Value
- ₹72,000 crore
- US Export Contribution
- ₹15,000 crore (20%)
- Workers in Tiruppur
- 10 lakh (60% women, 60% migrants)
- Migrant Workers' Origin
- Uttar Pradesh and Bihar
- Lenders' Exposure in Tamil Nadu
- Over 20% for Equitas, Aptus, Five Star, Shriram
- FOIR Calculation Changes
- 75% of cash salary (previously 100%), 50% of taxable income (previously 65%)