Tiruppur exporters hit by tariffs
India-US trade deal revives prospects for Tiruppur MSMEs hit by tariffs
Following steep US tariff hikes, Tiruppur exporters face challenges, but the India-US trade deal sparks renewed optimism for growth and employment
Tiruppur, known as India’s knitwear capital, accounts for nearly 90% of the country’s cotton knitwear exports. Built on thousands of MSME units, this textile cluster generates billions in foreign exchange and supports lakhs of jobs. However, in August 2025, the Trump administration imposed steep tariffs on textile imports, raising duties from 25% to 50%. The move triggered a severe slowdown in exports to the United States, which accounts for nearly 35-40% of Tiruppur’s outbound shipments.
Export slowdown
In this ground report, exporters describe months of piling orders, financial strain, and loan pressures they faced over the last six months. Young exporters like M Rakul spoke about goods lying unsold for months and the struggle to maintain working capital.
Six months of losses forced many MSME exporters to offer steep discounts and absorb rising costs just to retain US buyers. P Anbu Rose said, “Some units shut down, staff were laid off, and a few exporters even gave loans to workers to help them survive.”
Trade deal relief
The India–US trade deal announced last week reduced tariffs from 50% to 18%, reviving optimism in the sector. Experts estimate that exports could double to ₹30,000 crore in three years and create up to five lakh new jobs.
However, MSME exporters caution that stricter compliance norms, including rules of origin and social standards, could favour large corporates over small exporters. N Raghu explained that smaller players may face higher costs to remain competitive.
The future of Tiruppur
For decades, Tiruppur’s success has been built on a decentralised MSME-driven cluster model. Exporters now question whether the trade deal will strengthen this ecosystem or accelerate a shift toward large, vertically integrated corporate players.
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