Archive · 8 Jan 2026
US Tariffs Cripple India's Textile Exports
The US has put very high taxes (50%) on Indian products like clothes, shoes, and jewelry.
This is making it hard for Indian companies to sell their goods in the US, which is a very important market for them.
Many companies have already cut production and laid off workers.
They are trying to find new customers in other countries, but it's not easy.
The Indian government is also trying to help by talking to the US government to make a trade deal, but it's taking a long time.
If the deal doesn't happen soon, many more companies might have to close, and a lot of people could lose their jobs.
Some companies are even thinking about moving their factories to other countries where the taxes are lower.
US imposed 50% tariffs on Indian textiles, handicrafts, and other goods in August 2025, causing significant financial strain.
Indian exporters, particularly in Tiruppur, have cut production and laid off workers due to reduced order volumes.
Trade deal negotiations between India and the US are stalled, with a crucial deadline of January 15, 2026, to secure summer 2026 orders.
Exporters are diversifying markets and exploring workarounds like setting up US subsidiaries or moving production to countries with lower tariffs.
The Indian government has allocated $5 billion to protect exporters, but the long-term impact remains uncertain.
- Who
- Indian textile, handicraft, apparel, gem, and leather exporters, especially those in Tiruppur
- What
- US tariffs causing financial strain, job losses, and potential long-term market share decline
- When
- August 2025 (tariff imposed), January 2026 (article published)
- Where
- India, particularly Tiruppur and New Delhi
- Why
- US tariffs imposed on Indian exports, trade deal negotiations stalled
- Total Knitwear Exports (FY25)
- ₹44,747 crore
- Exports to US (FY25)
- ₹22,486 crore (34% of total)
- Tiruppur's US Export Share
- 30-35% of its knitwear exports
- Monthly US Exports
- ₹1,000–1,500 crore
- Potential Losses (Next 2 Months)
- ₹2,000–3,000 crore
- Potential Long-Term Losses
- ₹6,000–8,000 crore
- Interest Subvention
- 2.75% on export credit (₹50 lakh cap)
- Exporters in Tiruppur
- 2,500 registered, 20,000 support units
- US Tariff Rate
- 50%
- India-US Trade (2024)
- $87.4 billion
- Apparel Imports Drop (Sep 2025)
- 12% to $376 million
- Rugs Imports Drop (Sep 2025)
- 10% to $98.4 million