Tiruppur knitwear units in Tamil Nadu sending consignments to US at discount
TIRUPPUR: The 50 % tariff hike is expected to severely impact Tiruppur, the knitwear capital of India. In a bid to avoid losses, Tiruppur exporters have started exporting knitwear to the US at a discount. Meanwhile, some manufacturing units that only export to the US have stopped production.
In light of this, exporters are expecting concessional announcements to address the impacts.
KM Subramanian, president of Tiruppur Exporters’ Association (TEA), said, “We have not received any positive signal. Therefore, exporters are currently in a position to export completed orders to the US at a discount.
Currently, our exporters are offering discounts of 2% to 5% to US buyers and shipping orders. In addition, orders from the US are likely to be affected as US buyers are not ready to face higher import tariffs on new orders. We will meet the central government officials in this regard in a few days.”
N Thirukumaran, general secretary of TEA, said, “US buyers are asking to hold orders they have already placed due to the tariff hike. As a result, knitwear worth Rs 3,000 crore-Rs 4,000 crore is stagnating in Tiruppur.
As these are specially tailored for US companies, we cannot sell them to other companies or buyers. We cannot hold on to them for long either. Therefore, to avoid losses, exporters are forced to provide discounts to US buyers.”
“Besides, exporters have stopped production of orders at the behest of buyers in the US, affecting production at many units. About 30% of companies in Tiruppur export 80-100% of their output to the US, and they will be severely affected,” he added.
“Currently, exporters are trying to cope, but the situation should not last. The central government should take appropriate steps, and concessional schemes should be announced for exporters. In particular, a two-year moratorium for exporters on repayment of principal amounts of bank loans must be granted, apart from a special emergency credit facility for exporters,” he added.
P Shanmuga Sundaram, who exports knitwear to the US, said, “I have a stock of manufactured knitwear worth Rs 15 lakh. The US-based buyer is not ready to purchase at the moment, and has instructed me to put it on hold.”
Knitwear worth Rs 44,747 crore was exported from Tiruppur in the last financial year, of which about 35 % was to the US.