The Trump administration’s 50 percent tariff on Indian exports has brought this southern industrial city, known as “Dollar City” for its dominance in U.S. apparel markets, to a near standstill, according to a report in the Washington Post.
Once thriving with more than 600,000 workers, Tiruppur’s garment factories have seen production fall by 25 percent, according to G. Sampath of the Center of Indian Trade Unions. The slowdown has left thousands of migrant laborers from rural states jobless or working reduced hours as U.S. orders are canceled or delayed. “There’s no option but to cut overhead costs and eventually downsize,” said Mohan Shankar, managing partner of Geena Garments, to the Post.
The United States doubled tariffs on Indian goods to 50 percent in August after India continued purchasing Russian oil. Manufacturers say the move wiped out profit margins on clothing that typically retails for only $5 to $10 in the United States. Exporters report that U.S. buyers are demanding discounts of up to 20 percent to offset costs.
Beyond the short-term pain, there are fears that Indian manufacturers could quickly lose their U.S. market share to competitors like Bangladesh and Vietnam, which face only 20 percent tariffs. “It will be easy for [American] companies to make the switch,” said Ajay Srivastava, founder of the Global Trade Research Initiative, a think tank based in New Delhi.
Sanoj Kumar, 32, recalled rushing to finish and ship final orders for his employer before the heightened duties took effect. “They made us work day and night to get everything out in time,” he said to the Washington Post. “Days later, we were told not to report to work. There were no more orders to fill.”