Optimism returns to India's largest textile hub after deal with US
The textile and apparel sector has emerged as one of the biggest beneficiaries of the deal, under which US tariffs on Indian garments have been reduced from 50% to 18%
After months of uncertainty, optimism has returned to apparel manufacturers and exporters in Tiruppur, India's largest textile hub, following an interim trade agreement between the United States and India.
The textile and apparel sector has emerged as one of the biggest beneficiaries of the deal, under which US tariffs on Indian garments have been reduced from 50% to 18%.
Industry leaders said the move would provide immediate relief to exporters who had been operating at losses while fulfilling existing orders.
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India exports apparel worth about $10.5 billion annually to the US, its largest textile market. Exporters said the tariff cut would restore competitiveness and improve profitability.
Major apparel exporters noted that the agreement would ease pressure from discounted deals. Pearl Global Industries Ltd, which supplies brands such as GAP Inc and Ralph Lauren Corp, said the removal of penalty tariffs would boost margins.
"With the penalty now eliminated, discount pressure will reduce, directly boosting profitability from February onwards," said P Banerjee, managing director of Pearl Global.
Textile exporters in Tiruppur welcomed the India-US framework trade agreement, saying it would help the sector compete more effectively with Bangladesh, Vietnam and China.
Industry representatives said garment orders worth around Rs4,000 crore had been stuck due to tariff uncertainty and were expected to be cleared following the agreement, which has taken immediate effect.
Tiruppur Exporters' Association President KM Subramanian described the joint statement by India and the US as "significant" and said exports from Tiruppur could double over the next five years. Currently, the hub's garment exports are valued at around Rs15,000 crore, according to him.
Subramanian, who is also founder-chairman of KM Knitwear Pvt Ltd, said the deal could generate substantial employment.
"About one million people are currently employed in the industry. I am hopeful that another 500,000 jobs could be created over the next three to five years if the momentum continues," he said, adding that the immediate impact would be visible within three to four months.
South Indian Mills Association President Durai Palanisamy said the deal with the US, along with improved trade ties with the European Union, would increase demand for Indian textile exports due to enhanced global competitiveness.
M Rathinasam, founder of Tiruppur-based Starlight Exporters, said earlier many orders had shifted to Bangladesh and other countries, but expressed hope that more orders would now return to India and that work on pending orders would resume soon.
A Sakthivel, chairman of the Apparel Export Promotion Council, said the agreement would also help address non-tariff barriers and reduce compliance burdens for exporters.
