"How US tariffs are unraveling India’s textile industry", 16 September 2025

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Rajesh Kumar, who manages the unit, told Al Jazeera that orders for yarn have plunged by nearly 30 percent in just two weeks since the US rolled out a sweeping 50 percent tariff on Indian goods – a two-tiered levy which took full effect on August 27...

“The local textile factories we supply are telling us there’s uncertainty in future US orders,” he said. “Until that clears, new production cannot be planned.”...

Ludhiana, one of India’s biggest textile hubs in the northwestern state of Punjab, is particularly exposed...

Ashwin Aggarwal, head of garment exports at Nahar Industries, which supplies to brands, such as GAP, Tommy Hilfiger and Phillips-Van Heusen Corp in the US, said the company exports garments worth about $35m to $40m annually. Business has slowed dramatically since the 50 percent tariff came into effect, he said.

“We have not received any fresh orders since the announcement,” he said. “Smaller brands that used to procure from us have already told us they will not place orders any more. The larger ones, tied into longer contracts, will at least allow the current production cycle to finish – but they are insisting we absorb 25 percent of the tariff burden. That makes operations brutally cut-throat, with margins collapsing. If we cannot find alternative ways to stay competitive, we may be forced to lay off people.”...

Amit Thapar, chairman of CII’s Northern Region Export Promotion Committee, described the move as “not just a dent to our profits – it’s a death knell for our competitiveness and survival”...

Thapar noted that even the raw materials that Indian firms source from overseas to use in their products are faced with these levies. He added that the measure seems more like a form of punishment and is raising serious concerns about potential disruptions to supply chains...

Ludhiana is far from the only city at risk. Other textile-rich hubs such as Tiruppur, Panipat, Surat, Bikaner, and Coimbatore are also facing precarious conditions.

Panipat in Haryana, one of the world’s largest textile recycling hubs and India’s biggest supplier of blankets, carpets, and shoddy yarn, has an export turnover of about 200 billion rupees ($2.2bn). Of this, home textiles alone account for about 120 billion rupees ($1.3bn) in annual sales to the US, making up roughly 60 percent of the city’s total exports.

Rakesh Kumar Goyal, who runs an industrial unit in Panipat...had been in exploratory talks to supply to US retailers, such as Walmart, IKEA and H&M Home. But those plans have come to a screeching halt now...

Vinod Dhamija, president of the Haryana Chamber of Commerce and Industry, said, “Some industry owners are now considering rerouting their supply chains through countries such as Bangladesh or Vietnam to facilitate exports to the US. Exporters are either planning to set up warehouse facilities in these countries and carry out minimal value addition there, or are in talks with US importers for additional support to make this arrangement viable. If the current tariffs remain in place, this could mark a significant shift in trade strategy.”...

In Tiruppur...orders halted when the 50 percent levy was announced in early August. The blow is particularly cruel as Tamil Nadu’s textile belt had actually been gearing up for a rebound in US demand on the back of the initial round of higher tariffs on other countries. Many exporters had invested in new machinery, anticipating a surge in orders, including from the India-UK free trade agreement...

Kumar Duraisamy, joint secretary of the Tiruppur Exporters Association, told Al Jazeera that when levies of 25 percent were announced, buyers gave suppliers a deadline and told them to ship whatever was ready by August 27 and asked them to absorb part of the tariff, conditions that they agreed to. But with the additional 25 percent, orders were effectively put on hold...

A large share of these workers are home-based, many are women and at the very end of the production chain, said Mary Anuklatham of Social Awareness and Voluntary Education in Tiruppur. “The immediate impacts are not yet visible for home-based workers, but if the tariff remains in place, the coming months could be devastating. Women already earn less than a dollar a day and may find themselves deprived even of that.”..

Thapar said that even if the government cannot safeguard their profits, some form of support is essential to prevent losses and layoffs. He warned that without timely intervention, there is a real risk of job losses across the country’s textile hubs.