India: Tiruppur garment industry seeing mass layoffs & factory closures, as brands demand up to 30% in discounts amid US tariffs
"Tariff effect: Tiruppur sees factory closures, layoffs", 28 September 2025
The Tiruppur garment industry is staring at an existential crisis, as job losses and shutdowns of factories in the aftermath of US tariff implementation have started playing out over the past two weeks.
Several exporters have closed their garment-manufacturing units after US buyers either stopped purchases or demanded steep discounts...
R. Rajkumar, MD of RRK Cottons India Pvt. Ltd., said: “I have five factories in Tiruppur and Palladam, where we employ around 2,000 people. I am stuck with around ₹60 crore worth of finished goods meant for the US. We have already shut down two factories catering to the US market and laid off nearly 1,000 people.”
He added that goods worth nearly ₹25 crore are ready to be shipped to the US, but buyers are demanding 20–25% discounts on current as well as future orders. Rajkumar, who supplies to Walmart and other brands, warned that if fresh orders do not come in after November 15, the company may have to suspend operations except for factories serving the European market.
Another exporter...echoed the concern.
“I have four factories, of which one has been closed temporarily. Around 850 people have been laid off for now. Nearly 30% of my ₹62 crore worth of goods have been hit by the tariffs,” he said on condition of anonymity. “US buyers are asking for 15–20% discounts on present and future orders.”
A third exporter said one of his two factories, which together employ 5,000 workers, has been shut, affecting 1,000 employees... “US buyers are now demanding 20–30% discounts. If tariffs continue beyond January, I may have to shut my second factory as well,” he said...
Exporters do not believe Europe can absorb the goods diverted from the US...
The crisis is expected to create ripple effects. A senior executive at a US-based liaison office in Coimbatore explained: “...In Dindigul, I hear some spinning mills are working on rotation and laying off employees. This will hit ancillary sectors such as carton box, polybag manufacturing, and transportation.”
Cotton farmers too are bracing for losses, with crop prices likely to fall sharply in the next season...