Relief to Tamil Nadu's textile industry due to American tariff cut
By yash chouhan 2026-02-04 18:30:36
US tariff cut a lifeline for TN textile industry, says association.
The rollback of the 50% US tariff is a lifeline for the Indian textile industry, said the Tamil Nadu based Southern India Mills’ Association, (SIMA) on Tuesday.
The sudden imposition of the 50% US tariff had posed an unprecedented challenge to the textile and clothing industry largely spread across Tamil Nadu’s districts of Coimbatore and Tirupur. Indian textile accounts for nearly 29% of total US textile and apparel imports.
The abrupt tariff hike had not only disrupted India’s manufacturing value chain but has also adversely impacted US consumers and importers through higher costs and supply uncertainties, said exporters. Textile and clothing (T&C) exports to the US, amounting to around USD 11 billion, account for nearly 29% of India’s total T&C exports, underscoring the market’s critical importance to the sector.
Exporters predominantly dependent on the US market, particularly those in Tamil Nadu, faced a severe crisis following the tariff hike, said chairman of SIMA, Durai Palanisamy on Tuesday. “Production levels declined by 30–70% across several units, rendering around 10 lakh workers jobless and prompting the Government to announce a relief package to mitigate the unforeseen disruption,” said Palanisamy.
US buyers began shifting their sourcing to competing countries such as Pakistan, Bangladesh and Vietnam, posing a serious threat to India’s export competitiveness and market share in the US textile and apparel segment, exporters said.
The SIMA chairman said that the 18% tariff is the lowest rate negotiated by any T&C export competing country with the United States, reflecting the Indian government’s strong diplomatic and trade efforts. He noted that India has successfully concluded trade agreements with three major global economies and markets – the US, the UK and European Union, apart from several other countries and is steadily moving towards securing preferential or free market access across most key international markets.
Palanisamy thanked Prime Minister Narendra Modi and the Union minister of commerce and industry, Piyush Goyal for successfully concluding two landmark trade deals within a week, in addition to announcing “game-changing policy measures” for the textile industry in the recent Union Budget 2026–27.
As the second-largest employment provider after agriculture, supporting over 110 million livelihoods, particularly the rural communities and women, the sector has traditionally depended heavily on the US market and was anticipating the early conclusion of a Bilateral Trade Agreement between the two Nations, which had been progressing on a fast track, said SIMA’s secretary general K Selvaraju. “The industry is now poised to achieve a sustained double-digit growth rate in the coming years, aligned with the Prime Minister’s vision of building a Viksit Bharat by 2047,” Selvaraju said. “With strong policy support, enhanced market access and continued investments, the textile and clothing sector aims to expand to a domestic market size of $1.8 Trillion and achieve export earnings of $600 Billion, positioning India as a global leader in the textile value chain.”
