How US tariffs are unraveling India’s textile industry

Ludhiana, India – On the level of a Ludhiana spinning mill, 29-year-old Pankaj Kumar stands astatine his station, his fingers a blur arsenic helium knots escaped threads and feeds them onto a spinning wheel. The yarn volition soon marque its mode to the city’s textile factories, which nutrient woollen knitwear, hosiery, and different garments, overmuch of it destined for the United States.

Kumar has worked successful antithetic spinneries for astir a decade, but for the past 4 months, this 1 has been his livelihood, bringing successful 18,000 rupees ($203.87) a month. But present that US President Donald Trump has slapped India with 50 percent tariffs, Kumar’s income is uncertain. “I don’t know,” helium says. “The mill proprietor was saying we are unsure however overmuch to manufacture successful the coming months. They mightiness not request me.”

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Rajesh Kumar, who manages the unit, told Al Jazeera that orders for yarn person plunged by astir 30 percent successful conscionable 2 weeks since the US rolled retired a sweeping 50 percent tariff connected Indian goods – a two-tiered levy which took afloat effect connected August 27. Of that, the archetypal 25 percent kicked successful connected August 7 and was aboriginal doubled arsenic punishment for India’s imports of Russian oil.

“The section textile factories we proviso are telling america there’s uncertainty successful aboriginal US orders,” helium said. “Until that clears, caller accumulation cannot beryllium planned.”

India has denounced the tariff hike as “unfair” and “unjustified”. But the daze is already rippling done textile units crossed the country. The assemblage contributes astir 2.3 percent to India’s gross home merchandise (GDP), 13 percent to concern production, and 12 percent to full exports. It is besides the second-largest leader aft agriculture, providing nonstop enactment to much than 45 cardinal people, galore of them women and members of the agrarian workforce.

The stroke is peculiarly crisp due to the fact that the manufacture relies heavy connected the US, which is 1 of India’s largest markets for textiles and apparel. In 2024, India reportedly supplied astir 6 percent of US apparel imports, amounting to $4.8bn. That represented astir one-third of India’s full apparel exports, and a important stock of its broader textile exports.

No caller orders

Ludhiana, 1 of India’s biggest textile hubs successful the northwestern authorities of Punjab, is peculiarly exposed. Each year, the metropolis ships astir $700m worthy of hosiery and knitwear – particularly woollens – to the US, and the manufacture present employs much than 500,000 workers.

India’s textile assemblage is the second-largest leader successful the country, and those jobs are successful peril with US tariffs of 50 percent [Anuj Behal/Al Jazeera]

Ashwin Aggarwal, caput of garment exports astatine Nahar Industries, which supplies to brands, specified arsenic GAP, Tommy Hilfiger and Phillips-Van Heusen Corp successful the US, said the institution exports garments worthy astir $35m to $40m annually. Business has slowed dramatically since the 50 percent tariff came into effect, helium said.

“We person not received immoderate caller orders since the announcement,” helium said. “Smaller brands that utilized to procure from america person already told america they volition not spot orders immoderate more. The larger ones, tied into longer contracts, volition astatine slightest let the existent accumulation rhythm to decorativeness – but they are insisting we sorb 25 percent of the tariff burden. That makes operations brutally cut-throat, with margins collapsing. If we cannot find alternate ways to enactment competitive, we whitethorn beryllium forced to laic disconnected people.”

Trump’s earlier tariff connection successful April – launching with a 10 percent cosmopolitan work and mounting India’s complaint astatine 26 percent, little than those for rival garment hubs similar Bangladesh, Vietnam, and China – had concisely raised hopes that India could grow its stock of the $16bn US apparel market. But with India present astatine the highest tariff tier, compared with 20 percent for Bangladesh and Vietnam, 19 percent for Pakistan, and 30 percent for China, those expectations person collapsed.

The Confederation of Indian Industry (CII), an manufacture body, has warned that the tariff hike could beryllium devastating. Amit Thapar, president of CII’s Northern Region Export Promotion Committee, described the determination arsenic “not conscionable a dent to our profits – it’s a decease knell for our competitiveness and survival”.

Thapar noted that adjacent the earthy materials that Indian firms root from overseas to usage successful their products are faced with these levies. He added that the measurement seems much similar a signifier of punishment and is raising superior concerns astir imaginable disruptions to proviso chains.

India’s textile manufacture contributes astir 2.3 percent to the country’s GDP [Anuj Behal/Al Jazeera]

Ludhiana is acold from the lone metropolis astatine risk. Other textile-rich hubs specified arsenic Tiruppur, Panipat, Surat, Bikaner, and Coimbatore are besides facing precarious conditions.

Panipat successful Haryana, 1 of the world’s largest textile recycling hubs and India’s biggest supplier of blankets, carpets, and shoddy yarn, has an export turnover of astir 200 cardinal rupees ($2.2bn). Of this, location textiles unsocial relationship for astir 120 cardinal rupees ($1.3bn) successful yearly income to the US, making up astir 60 percent of the city’s full exports.

Rakesh Kumar Goyal, who runs an concern portion successful Panipat and supplies materials specified arsenic towels, cushion covers, and rugs chiefly to Brazil and countries successful Africa, had been successful exploratory talks to proviso to US retailers, specified arsenic Walmart, IKEA and H&M Home. But those plans person travel to a screeching halt now.

“If the tariffs stay successful place, suppliers to the US volition statesman scouting different markets wherever we whitethorn presently person a niche, and that volition lone intensify contention for us,” helium says.

Vinod Dhamija, president of the Haryana Chamber of Commerce and Industry, said, “Some manufacture owners are present considering rerouting their proviso chains done countries specified arsenic Bangladesh oregon Vietnam to facilitate exports to the US. Exporters are either readying to acceptable up warehouse facilities successful these countries and transportation retired minimal worth summation there, oregon are successful talks with US importers for further enactment to marque this statement viable. If the existent tariffs stay successful place, this could people a important displacement successful commercialized strategy.”

‘No further shipments’

In Tiruppur, a confederate metropolis successful Tamil Nadu that accounts for 68 percent of India’s knitwear exports, orders halted erstwhile the 50 percent levy was announced successful aboriginal August. The stroke is peculiarly cruel arsenic Tamil Nadu’s textile loop had really been gearing up for a rebound successful US request connected the backmost of the archetypal circular of higher tariffs connected different countries. Many exporters had invested successful caller machinery, anticipating a surge successful orders, including from the India-UK escaped commercialized agreement.

Buyers person enactment orders connected hold, and immoderate person asked suppliers to sorb portion of the tariffs [Anuj Behal/Al Jazeera]

But each of that is gone now.

Kumar Duraisamy, associated caput of the Tiruppur Exporters Association, told Al Jazeera that erstwhile levies of 25 percent were announced, buyers gave suppliers a deadline and told them to vessel immoderate was acceptable by August 27 and asked them to sorb portion of the tariff, conditions that they agreed to. But with the further 25 percent, orders were efficaciously enactment connected hold.

Tamil Nadu Chief Minister MK Stalin has appealed to Prime Minister Narendra Modi for urgent involution arsenic the authorities has a precocious dependence connected the US marketplace for its exports.

A ample stock of these workers are home-based, galore are women and astatine the precise extremity of the accumulation chain, said Mary Anuklatham of Social Awareness and Voluntary Education successful Tiruppur. “The contiguous impacts are not yet disposable for home-based workers, but if the tariff remains successful place, the coming months could beryllium devastating. Women already gain little than a dollar a time and whitethorn find themselves deprived adjacent of that.”

Thapar said that adjacent if the authorities cannot safeguard their profits, immoderate signifier of enactment is indispensable to forestall losses and layoffs. He warned that without timely intervention, determination is simply a existent hazard of occupation losses crossed the country’s textile hubs.