Trump’s 50% tariffs hit India’s garment factories badly
27-Aug-2025.
Garment factories in India’s Tiruppur have taken a toll due to Trump’s recent 50% tariffs.
In one such factory in Tiruppur, one of India's largest textile export hubs, only a fraction of some 200 industrial sewing machines on the floor are in operation, as workers make the last of the season's children's garment orders for some of the biggest US retailers.
Due to US President Donald Trump's big 50% Tariffs on India set to kick in from August 27 piles of fabric samples for new designs are gathering dust.
India is a major exporter of goods, including garments, shrimp and gems and jewellery, to the US. Trade experts say the high tariffs - including a 25% penalty for buying Russian oil and weapons - are like an embargo on Indian goods.
There's acute anxiety about what the future holds for employees and employers across Tiruppur which contributes to a third of India's $16bn (£11.93bn) exports of ready to wear garments to brands such as Target, Walmart, Gap and Zara.
An owner of a factory said, "There may be nothing left to do from September onwards," as clients have stopped all orders.
He recently had to pause his expansion plans and bench nearly 250 new workers who were hired before the tariffs were imposed.
To make the things worse the timing of the announcement has caused more anxiety as nearly half of annual sales for most export businesses are made during this period, as Christmas approaches.
Now these units are banking on the domestic market and on the upcoming Diwali season in India, to survive.
In another factory where undergarments are made inventory of nearly $1m, meant for US stores, piled up with no takers.
Garment shop owner Ravi said, "We were hoping India will ink a trade deal with the US. The entire production chain was frozen last month. How will I pay workers if this continues’’ asks Ravi’’?
Due to 50% tariff rate, an Indian-made shirt that earlier sold for $10 will now cost US buyers $16.4 more costlier than $14.2 from China, $13.2 Bangladesh or Vietnam $12.
India will be less competitive than its Asian peers, even if duties ease to 25%.
The government has announced some measures, a suspension of import duties on raw materials, for instance, to help locals manage business. Trade talks with other countries have also gathered momentum to diversify markets. This is too late, many fear.
Global Trade Research Initiative’s Ajay Srivastava said, "We can expect the diversion of trade, as US buyers shift to Mexico, Vietnam and Bangladesh".
