The US accounts for around 30 per cent of Tiruppur’s total exports and nearly 55 per cent of India’s knitwear exports, making it the cluster’s single most critical overseas market. As orders from US buyers have declined sharply following the tariff hike, exporters are being forced to offer discounts of 25–30 per cent to retain long-standing customers. These price cuts are directly eroding margins and pushing many units into losses, exporters from the cluster said.
Tiruppur’s knitwear exporters are facing severe pressure after 50 per cent US tariffs sharply reduced orders from their largest market.
With the US accounting for nearly one-third of the cluster’s exports, firms are forced to offer deep discounts, eroding margins and pushing many MSMEs into losses.
Exporters are urging government support to offset tariff impacts and prevent long-term damage.
The Tiruppur Exporters Association (TEA) warned that the impact is particularly severe for MSME exporters, who typically operate on thin margins and lack the financial resilience to absorb sustained price reductions. Several exporters have reported order cancellations, shorter production runs and significantly lower capacity utilisation, with some units operating well below optimal levels. Given the cluster’s labour-intensive nature, the downturn is also raising concerns over job security and employment stability.
Exporters argue that replacing the US market is not a realistic short-term option. Although exploratory efforts are under way in regions such as the Middle East, Africa and parts of Europe, these markets are smaller, fragmented and often demand different product mixes, compliance standards and pricing structures. This dispersal of volumes across multiple destinations increases logistics costs, working capital requirements and operational complexity. MSMEs are also facing intensified competition from larger Indian garment exporters. With access to the US constrained, larger players are aggressively targeting Europe, undercutting prices and pushing smaller MSMEs closer to the brink.
Against this backdrop, Tiruppur exporters have urged the government to introduce direct relief measures similar to those provided during COVID. They are seeking support that would help absorb part of the tariff burden, retain US buyers and prevent a permanent erosion of market share. Industry bodies caution that without timely intervention, prolonged losses could weaken the export base, disrupt supply chains and undermine India’s standing in the global knitwear market.
KM Subramanian, president of TEA, told Fibre2Fashion, “The central government has assured exporters of relief on bank loans and is actively working on it. However, the situation is far more severe for Tiruppur exporters. We need direct financial support so that exporters can remain competitive despite the 50 per cent US tariffs.”
TEA added that the current crisis is, in some ways, worse than the pandemic, as business activity has nearly come to a standstill. The association has urgently sought government intervention, specifically requesting a 20 per cent EXIM scrip or targeted subsidies to bridge the tariff gap and help exporters retain global buyers.
Fibre2Fashion News Desk (KUL)
