Tirupur exporters hit by US tariffs: Apparel hub stops getting fresh orders; customers renegotiating old ones

CHENNAI: Tirupur knitted apparel exporters brace for drop in orders, reduction in profit margins and potentially losing long-term customers as the US govt's additional 25% tariffs kick in from Wednesday.

Exporters huddle with a series of meetings and intermittent calls to plan next steps. Anticipating punishing US tariffs, many buyers have put a pause on most fresh orders, said Alexander Neroth, director of NC John Garments, an exporter from Tirupur with significant exposure to the US."Many knitwear companies here have significant exposure to US and we are witnessing impact of tariff with slowdown or complete pause of fresh orders.

Customers are renegotiating previously placed orders but with most small and medium scale enterprises operating with 8-15% margins, it is difficult for us to absorb the cost," he said.Hardik Chheda of Prachi exports, for which US exports consists of 45% of its business, said it is unviable for companies to bear the costs. "At best, companies can offer 5% discount on prices, which will have a 7% reduction in landed cost.

But some companies are offering discounts without any margins, hoping for a turnaround so that at least we have a business to hold," he said.

Tirupur forms a major chunk of India's readymade garment exports to the US and has exported more than 15,000 crore worth goods to the country in FY25, according to trade bodies. SBI Research puts the tariffs on knitted apparels at 63.9% and anticipates high impact on the industry.

Companies estimate the total tariff at 67%.Knitwear units are rushing to find customers in other markets, especially in the UK, where India recently signed a free trade agreement. People TOI spoke to say the volume exports from the US cannot be matched by other destinations and anticipate job losses if the tariff stays in place. The textile industry in Tirupur district employs about 6 lakh people.