TIRUPPUR: With no major announcements made in the Union Budget to address the impact of the US tariff hike, Tiruppur exporters are planning to meet with Union Finance Minister Nirmala Sitharaman soon.
KM Subramanian, president of the Tiruppur Exporters' Association (TEA), said, "The Union Budget is growth-oriented and is leaning towards the development of the textile industry.
However, the Tiruppur knitwear industry has experienced a slight slowdown due to the US tariff hike. To meet this, we expected certain announcements in the Union Budget, including the Focus Market Scheme and strengthening of the interest subvention scheme.
However, these expected announcements were not included. Therefore, we will soon meet with the union finance minister or reach out to her through a letter."
Earlier, the knitwear industry had requested the union government to announce various schemes to mitigate the impact of the US tariff hike.
In particular, they had requested a Focus Market Scheme (FMS) for apparel exports to the US. Under the proposed scheme, exporters should be provided a freely transferable incentive scrip equivalent to 20% of the FOB value of exports, aligned with the period for which the additional US tariff remains in force.
Also, industry people had requested an increase in the interest subvention rate to 5% from 2.75%, along with relaxation of the `50 lakh annual cap, to meaningfully support MSME exporters.
During a discussion on Monday on the Union Budget 2026-27, Subramanian responded to various queries posed by TNIE. "We are bringing the impact of the US tariff hike to the government's attention through letters and the media. We hope the union government will bring an amicable solution to this soon," he said.
Further, Subramanian said the recently concluded Free Trade Agreement (FTA) with the European Union (EU) would help recover from the impact caused by the US tariff hike. "We currently export about 40% of our knitwear to the EU. After the FTA, our exports are set to double in three years," he said.
"Since some specific styles of knitwear garments are available only with us, a certain percentage of US buyers prefer to continue doing business with Tiruppur knitwear makers. We are currently offering them a 15-25% discount. They believe that this tariff burden will be lifted soon," he added.
V Elangovan, vice president of TEA, said, "We currently export only $13 billion worth of knitwear to the EU. The FTA may increaseit to $40 billion in a short term, helping offset the impact of the high US tariffs. A similar FTA had provided a huge boost to Bangladesh."
Kumar Duraiswamy, joint secretary of TEA, said, "So far, there have been no job losses in Tiruppur due to the impact of the US tariffs, but the working hours of workers have been reduced. Before the tariff issue, there was a shortage of one lakh workers in Tiruppur."