India: US garment buyers halt orders & demand discounts as exporters are 'stuck' with 'massive unsold inventories', triggering mass layoffs
"Tiruppur Garment Industry faces existential crisis as US tariffs trigger layoffs and factory closures", 4 October 2025
...Tiruppur...is reeling under a severe crisis as the impact of US tariffs begins to bite. Over the past two weeks, several exporters have shut down operations and laid off workers after American buyers either halted purchases or demanded steep discounts...
With Christmas shipments...usually dispatched around September and October, exporters are now stuck with massive unsold inventories.
R. Rajkumar, MD of RRK Cottons India Pvt. Ltd., said: “I have five factories in Tiruppur and Palladam, employing 2,000 people. We are sitting on ₹60 crore worth of finished goods meant for the US. Two factories are already shut, and 1,000 workers have been laid off.”
He added that buyers, including Walmart, are demanding 20–25% discounts on present and future orders. Without fresh demand after November 15, he fears further shutdowns.
Other exporters echoed similar fears. One said he had closed one of his four factories, laying off 850 workers, with nearly ₹62 crore worth of goods hit. Another exporter, entirely dependent on the US market, has already shut down one factory employing 1,000 of his 5,000 staff, and is stuck with ₹70 crore worth of stock...
The situation is also creating ripple effects across the supply chain. A US-based liaison officer in Coimbatore said that spinning mills in Dindigul have cut production and laid off staff, while ancillary industries such as carton box, packaging, and transportation are beginning to feel the pinch. Cotton farmers are bracing for falling crop prices as demand dips.
Raja Shanmugam, former president of the Tiruppur Exporters’ Association (TEA), estimated that ₹3,500 crore worth of orders are currently stuck...
Exporters say Europe...cannot compensate for the US market’s scale....