In Tiruppur, a major textile hub in India, a quiet tension fills the air. Inside N Krishnamurthy’s garment factory, most sewing machines are silent. Workers are finishing the last of their children’s garment orders for big US retailers. Fabric samples lie untouched, victims of steep new tariffs announced by the US government.
The tariffs, which hit 50%, are expected to have a devastating effect on India’s garment exports, which are already under pressure. The US imports a huge amount of clothing from India, but these new costs could push buyers to cheaper markets like Vietnam or Bangladesh. For many manufacturers, like Krishnamurthy, this means a drastic slowdown in orders. He even had to pause plans to hire 250 new workers.
September usually starts a busy season for these businesses. With the holiday rush approaching, many worry they’ll run out of work. At another factory, Siva Subramaniam faces a similar crisis. His inventory, worth nearly $1 million, sits idle. “How will I pay my workers?” he wonders, echoing a sentiment heard all around the region.
The math is troubling. A shirt that cost $10 is now priced at $16.4 for American buyers—making it pricier than similar shirts from competitors. Even if the tariffs were to drop to 25%, India would still lag behind.
To help ease the situation, the Indian government has taken some steps, like suspending import duties on raw materials. But many believe these measures won’t be enough to prevent a shift in trade patterns. Ajay Srivastava, a trade expert, predicts US companies might turn to Mexico and Vietnam instead of India.
Meanwhile, about 1,200 km away in Surat, the diamond industry is also feeling the pinch. Factories there polish 90% of the world’s diamonds. With US tariffs looming, the mood is tense as jewellery makers fear losing significant sales during key months. Adil Kotwal, who sells most of his jewelry to the US, estimates profits could dwindle quickly over any increased costs.
Even shrimp farmers are considering diversifying their products as total tariffs could surpass 60%. In peak seasons, they usually thrive, but uncertainty now grips the industry. Overall, this situation could impact about three million people dependent on shrimp farming.
As talks between the US and India stall, there’s a growing sense of urgency. Gopal Naddur of the Asia Group notes that India’s leaders must push for self-reliance and explore new trade opportunities. The future of these industries and the lives of millions hang in the balance.
For more on international trade and economic impacts, check resources from BBC News.
