US Tariffs Threaten to Weaken the Textile Industry: Insights from the Indian Textile Federation Coordinator

Coimbatore:

Prabhu Damodaran, Coordinator of the Indian Textile Federation, has raised an alarm about the impending crisis facing the textile industry. This comes after US President Donald Trump declared a hefty 25% tariff on goods imported from India, effective August 1. The total tariff has now surged to 50%, catching many in the sector off guard.

Damodaran expressed deep concern, noting that about 33% of India’s exports consist of garments, with nearly half of that being home textiles. He stated, “This tariff is significantly higher than what India’s competitors face, which is simply unacceptable.” With the textile sector already fragile, he warned that this move could push the industry into a serious crisis.

Damodaran urged the Indian government to engage in urgent talks with the US to secure a more favorable arrangement. He highlighted that the situation is partly linked to geopolitical tensions, specifically regarding Russia. “The US is using tariffs as leverage against Russia. However, our industry shouldn’t bear the brunt of these international negotiations,” he added.

He emphasized the need for rapid governmental action, suggesting that the Centre should prioritize the textile sector, including assistance through banks and export subsidies. With the deadline for implementation just 21 days away, time is of the essence.

The uncertainty is palpable. Damodaran pointed out that the entire export sector is facing a critical crossroads. “We must communicate with foreign buyers immediately. Will they continue to place orders? Or are we forced to halt production?” he questioned.

This situation is unprecedented. Many in the industry are left wondering how American consumers will react once they see rising prices resulting from these tariffs. Damodaran believes that this could ultimately backfire on US consumers, as it may lead to limited product availability and increased costs.

Recent statistics show that global trade tensions have already impacted industries worldwide. According to the World Trade Organization, global merchandise trade volume fell by 5.3% in 2020 due to tariffs and other trade barriers. This historical context highlights the potential long-term effects of current discussions.

As the stakes rise, Damodaran’s hope remains: “I am confident that a solution can be found in the next 21 days. However, we must confront this challenge together.” The outcome of this situation will significantly shape the future of India’s textile industry and its interactions on the global stage.

For more information on international trade and its implications, check out the World Trade Organization’s report here.

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TEXTILE INDUSTRY, DONALD TRUMP, INDIA AND US, GARMENTS, US TARIFF, US TARIFF | TEXTILE INDUSTRY IS GOING TO SUFFER, SAYS INDIAN TEXTILE FEDERATION COORDINATOR