India’s Tirupur knitwear faces US tariff shock as fresh orders stall and old deals renegotiated

Tirupur’s knitted apparel exporters are facing a sharp slowdown in business following the US government’s new 25% tariffs, which took effect on Wednesday. Fresh orders from American buyers have largely stalled, while ongoing deals are being renegotiated, squeezing already tight profit margins.

“Many knitwear companies here have significant exposure to the 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,” said Alexander Neroth, director of NC John Garments, a Tirupur-based exporter with substantial US business.

Hardik Chheda of Prachi Exports, where US exports make up 45% of the business, said it is practically unviable for companies to bear the additional cost. “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 added.

Tirupur accounts for a major portion of India’s readymade garment exports to the US, with shipments exceeding ₹15,000 crore in FY25, according to trade bodies. SBI Research estimates tariffs on knitted apparel at 63.9%, while industry sources calculate a total impact of around 67%.

Exporters are now exploring alternative markets, particularly the UK, which recently signed a free trade agreement with India. Still, many industry insiders warn that no market can fully replace the volume of US orders, and prolonged tariffs could lead to job losses in Tirupur, where the textile sector employs roughly 6 lakh people.

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With inputs from TOI



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