BENGALURU: After the 50% tariff imposed by the US President Donald Trump that disrupted textile production in hubs like Tirupur, Noida and Surat, where manufacturers have halted operations amid fears of falling competitiveness, the commerce and textile industry in the state has been advised to remain optimistic.
However, experts predict that specific labour-intensive units of the industry could be affected. The tariff imposed by Trump on Indian textile exports has come into effect from Wednesday.
Speaking to TNIE, Federation of Karnataka Chambers of Commerce and Industry (FKCCI) president MG Balakrishna acknowledged short-term challenges.
“There will be an impact to some extent. When the US stops imports, garment production plans would be disrupted. The garment industry, and in specific the labour-intensive units of the industry, could be affected. However, fabric manufacturers may not be hit as much, as fabrics will still be needed whether garments are made in India or in Bangladesh, Vietnam, or Cambodia,” he said.
Balakrishna said that cheaper labour markets like Vietnam and Bangladesh may not immediately absorb the US demand due to limited infrastructure. “Even if garments are made elsewhere, much of the fabric comes from India. So India will still benefit from fabric exports,” he said, adding that countries with zero-duty agreements with the US, such as Oman, could collaborate with Indian firms to route exports.
Employment in garment hubs may see a temporary hit, but the FKCCI president expects stability to return within three months. “The impact will be temporary. India is better placed than others because we already have the infrastructure,” and added that the textile industry should stay optimistic, and said that it is too early to make any predictions.
“Karnataka’s garment sector will face immediate pain — order cancellations, export declines, and job risks,” said trade activist Sajjan Raj Mehta, adding, “Cotton duty relief and policy support are cushioning the blow but may not suffice.”
In the long run, he stressed, “Survival depends on swift diversification, stronger trade policies, and tapping domestic demand, critical steps for renewal and resilience.”
The state’s commerce industry expects central support through export incentives and policies. With zero-duty pacts like the UK already in place, more such agreements and rupee-based trade could ease the tariff impact.