The Heat Is On: Textile Exporters And Workers Await Government Action

For nine years, Nagesh has worked as a helper in the auxiliary unit of a textile export company on the outskirts of Coimbatore. The unit, which employs about 100 workers, had always seemed steady to him. But in recent days, whispers of uncertainty have grown louder.

“I had no clue what was going to happen. Now they are saying the demand for our products has fallen. If they cut production, I’ll be in real trouble,” he says. Nagesh doesn’t know much about trade or diplomacy. What he does know is that his livelihood—and that of dozens like him—hangs in the balance.

Nagesh’s anxiety mirrors the wider uncertainty in Tamil Nadu’s textile belt. Three weeks after the new U.S. tariffs on Indian textiles took effect, exporters face shrinking orders, rising costs, and mounting uncertainty. Production cuts now seem inevitable; for workers like Nagesh, this threatens reduced wages or job loss.

Industry representatives warn that without swift intervention, the impact could be severe—not just for exporters but also for the hundreds of thousands of workers who depend on this sector. Exporters now look to the US–India trade talks, opening in New Delhi on Tuesday, for relief from the ongoing tariff crisis.

“If the authorities are not taking proactive measures, the situation will get out of control. In Tirupur, a significant number of export units depend solely on the U.S. market. Orders are drying up, and buyers are prioritising suppliers from other countries. So, the units are facing extreme situations,” says Raja M. Shanmugham of Warsaw International, who is also the former president of the Tirupur Exporters Association. If the government can’t make a deal with the U.S. administration, India should consider resorting to retaliatory tariffs,” he adds. In his view, only a firm stance will compel American buyers and policymakers to recognise the severity of the crisis. Without such measures, he fears India’s exporters will be left to shoulder the burden alone, with devastating consequences for workers and the wider economy.

Another worker, who is in the sewing section of a unit in outer Tirupur, says that out of the 500-odd machines, almost half of them have now become silent. She normally earns Rs 550 a day and is uncertain when the fall in production will affect her job.

Some smaller textile units have already scaled down production, sending many workers home. For weeks, exporters had been expecting government relief.

But the sudden U.S. tariffs have left the industry reeling. Now, exporters demand immediate measures to protect businesses and jobs.

“The buyers are asking for discounts, which is natural from their side, but exporters are simply not in a position to absorb them,” says Thirukkumaran Natarajan of Estee Exporters. “Unless the government intervenes immediately, even those units that have managed to hold on so far will be forced to scale down production, which will inevitably lead to layoffs. To prevent such a cascading effect, the government should consider introducing duty credit scrips to help offset the current crisis.”

India exports textiles worth approximately $ 11 billion to the U.S. every year, with nearly four billion dollars of that coming from the Coimbatore and Tirupur districts of Tamil Nadu. Tirupur alone accounts for Rs 12,000–15,000 crore in exports to the U.S. annually—almost 35 per cent of its total overseas trade. The two districts together form a dense, interlinked textile supply chain, with spinning mills, dyeing units, garment factories, and export houses feeding into one another. Any dip in export orders, therefore, does not remain confined to the exporters alone—it quickly cascades across the ecosystem, jeopardising thousands of jobs and unsettling an entire regional economy. The worst affected are exporters who do business only with US buyers.

The garment export business in Tirupur is built on the backbone of thousands of Micro, Small, and Medium Enterprises (MSMEs). These units handle every stage of the value chain, including spinning and supplying yarn, weaving fabric, processing textiles, compacting, printing, embroidery, ironing, and packing. Together, they form the invisible machinery that keeps Tirupur’s global knitwear hub running, and any disruption in exports threatens to ripple through each of these ancillary sectors.

‘The effects of the tariff imposition are already visible, says Siva Subramanian of Raft Garments. “Fifty per cent of our exports go to the U.S. We supply around one million garments every month. Currently, two million pieces are in production, with half of them ready for shipment. However, buyers are demanding a 12.5–15 per cent discount. We can’t afford that—our industry runs on single-digit margins,” he explains.

According to him, government intervention is crucial. “The Interest Equalisation Scheme (IES) must be reinstated to provide relief to exporters. The festival season is approaching, and workers expect bonuses, but we are in no position to extend such benefits. This will eventually affect the entire economy, because workers’ purchasing power will shrink,” he warns.

The repercussions, he adds, will not be confined to India. “U.S. consumers will also feel the pinch, with Christmas and Thanksgiving around the corner. The government should move quickly to sort out this issue.”

Despite exporters’ appeals, the Union government has not agreed to reinstate the Interest Equalisation Scheme or introduce duty credit scrips. Exporters maintain immediate relief is needed to prevent severe economic fallout, warning that the textile sector’s role as the largest employer after agriculture means job losses could hurt both industrial hubs and rural households.

The heat is already being felt in the export industry, with production slowing and smaller units sending workers home. Yet the government has not responded to exporters’ demands. Both exporters and workers watch anxiously, aware that without a trade agreement or immediate support, consequences could be severe for the industry—and for the millions who depend on it.