The tariffs imposed by the US on Indian exports have changed several times in the last few months, but despite this, Tiruppur in Tamil Nadu, which is called the knitwear capital of India, has been successful in retaining its American customers. In February, when the consignment of clothes from Tamil Nadu to Los Angeles was at sea, there were repeated changes in the tariffs imposed on Indian goods in America. Earlier this tariff had reached 50% in August last year, then it came down to 18% in early February and after a few weeks to 10%.
Since American importers have to pay duty only after the goods reach America, they benefited greatly from the reduction in tariffs on goods in transit. During this period, the exporters of Tiruppur continued talking to their buyers.
renegotiation of prices
This was a very challenging time for the exporters of Tiruppur. Many companies renegotiated prices with American customers, so that the deal could be finalized according to the change in tariffs. However, due to pre-determined rules, most of the exporters did not pressurize the buyers to demand back the extra amount. In fact, most of the shipments were sent under the FOB (Free on Board) system, in which the exporter is responsible till the goods are loaded on the ship and after that the buyer bears the expenses.
Exports worth Rs 16,000 crore to America
The finished clothes from Tiruppur are first sent to Tuticorin port by road. From there, the containers are transported in small ships to a larger ship docked near Sri Lanka, which then takes a journey of about two months to reach America. In the year 2024-25, clothes worth about Rs 16,000 crore were exported from Tiruppur to America.
Accepting lower profits to save business
During the time of tariff increases, many Indian exporters continued to trade at low profits or sometimes even losses to protect long-standing relationships with their American customers. On the other hand, American buyers also did not stop the orders completely, but agreed to bear some part of the burden themselves. According to the Tiruppur Exporters Association, the city’s exporters suffered a loss of about Rs 1,000 crore during this period because they gave discounts to customers to reduce the impact of tariffs.
The factories are back in glory again
Now after the reduction in tariff, the work in the factories of Tiruppur has increased again. The work of cutting, stitching and packing cloth is going on at a fast pace. However, exporters are still not completely relaxed, as they fear that policies may change again in the future. Despite this, exporters believe that America is the world’s largest textile market and it is not easy to ignore it completely. Therefore, the businessmen of Tiruppur are continuously trying to maintain their hold in this market through negotiations and strategies.