Tamil Nadu sounds alarm as US tariffs threaten jobs, textile exports

On August 13, Giriraj Singh, Union Minister of Textiles, said at a press briefing that, despite global challenges, the Indian textile industry will achieve a target of $100 billion in exports by 2030. This was about a week after the US’s 25% tariffs on Indian exports, imposed by the Trump administration, came into effect. 

Two weeks later, an additional 25% tariff hike was imposed by the US, India's largest export market. Now, with the tariff rate hiked to 50%, news reports suggest that the textile industry is under a lot of stress. A 50% tariff makes Indian garments significantly more expensive in the US. While some buyers may absorb the cost, many will cut back or switch to other countries. 

However, India’s textile industry is growing, which makes access to the American market crucial. 

In the same meeting on August 13, Singh also said that India is the 6th largest exporter of textiles and apparel in the world, with a 4.1% share in 2024. According to the latest MoSPI statement, 8.75% of the total number of industries in India manufactured textiles in FY24. This is a 1.6 percentage point rise compared with FY23. 

According to the data from the Ministry of Textiles, India exported textile items worth $34.4 billion in 2023-24, with apparel constituting 42% of the export basket, followed by raw materials/semi-finished materials at 34% and finished non-apparel goods at 30%. 

“It is also the second largest employment generator, after agriculture, with over 45 million people employed directly, including many women and the rural population. As further evidence of the inclusive nature of this industry, nearly 80% of its capacity is spread across micro, small and medium enterprises (MSME) clusters in the country,” said the statement. 

The Tiruppur factor

Since the tariffs have been imposed, there has been a lot of hue and cry among garment manufacturers and authorities, especially in states like Tamil Nadu. On August 16, Tamil Nadu Chief Minister MK Stalin wrote to Prime Minister Narendra Modi, seeking relief from the tariffs. 

“Tamil Nadu accounted for 28% of India's textile exports in 2024-2025, the largest contributor among all Indian states. Especially, our textile sector employs nearly 75 lakh people, and with a 25% tariff and a proposed 50% tariff, an estimated 30 lakh jobs are at immediate risk. To mitigate this crisis, it is essential to address structural issues that have long hindered our export competitiveness,” said the letter. 

In Tamil Nadu, textile manufacturing hub Tiruppur will be the worst hit. Data from the Tiruppur Exporters Association shows that the garment industry in Tiruppur earned Rs 39,618 crore in foreign exchange from exports alone in FY25. The data from the Ministry of Commerce and Industry shows that the corresponding figure for the whole of India was Rs 65,178 crore, indicating that the factories in Tirupur alone contributed to 60% of the forex that India earned through garment export in the last fiscal year.