Tamil Nadu's Textile Exporters To US Choose 'Wait And Watch' Mode; Some Pause Production

A number of garment manufacturers in Tamil Nadu's Tiruppur, who export to the United States, have halted production and several others are evaluating their options, industry representatives said on Saturday. Execution of orders has also been put on hold as per the American buyers' decision, they said.

With the US hitting India with a 50% tariff, they said textile and garment exporters to America are keeping their fingers crossed and are under a 'wait and watch' mode.

Following India's Free Trade Agreement with the United Kingdom, export-centric firms in Tiruppur, popularly known as a 'knitwear hub' in the country, are pinning hopes on the market there.

Industry officials said garment exports to the American market, in a year, constituted roughly Rs 12,000 crore, which is 30% of the total Rs 45,000 crore annual exports from the Tiruppur and nearby regions.

However, there is an apprehension now that at least 50 per cent of such export business to the United States market may be impacted due to the new tariffs, they said.

Tiruppur Exporters' Association President K M Subramanian told PTI, "Total exports made (from Tiruppur region) is about Rs 45,000 crore of which 30% (Rs 12,000 crore) is to the US market. We expect 50% business, which is about Rs 6,000 crore to be impacted.' Members of the TEA said that as an immediate measure, some garment manufacturers, who export to the US market, have halted production at their facilities.

Some are still evaluating other options to tide over the situation.

Subramanian said, "Right now, they (manufacturers who export to the US) have halted production. It will be severely impacting us (the trade). We are adopting a wait and watch strategy for the next two weeks." Asked on orders that had already been received, he said, "it has been put on hold as per the buyers' decision. We are just holding the stock..." Further, the TEA top official said. "Exporters making standalone shipments to the United States will be facing severe hardship due to imposition of tariff." On the immediate plans for the industry vis-a-vis US tariffs, he said, 'We will wait for the next couple of weeks. After that we will convey our position to the Central and State governments.' Answering a question, he said the industry has a good opportunity to export to the United Kingdom following the signing of the FTA. "There is a good chance for us to explore that market also." he said.

Another industry veteran said the expected loss of Rs 6,000 crore worth US market business could be offset by shifting exports to other countries.

"We expect that a shift to other countries may happen (in future)." the official who did not want to be named said.

The industry would make a representation to both Central and State governments in view of the tariff's impact on the industry.

"We will definitely go and meet both the Central and State governments." he added.

On Aug. 6, the United States announced an additional 25% tariff on all Indian imports, on top of an existing 25% duty, taking the total duty to 50% effective Aug. 27.

The White House said the measure was in response to India's continued purchase of Russian oil.

Sectors like textiles, chemicals, dairy, leather and footwear are expected to be affected by US duties.