US tariff shock batters Coimbatore–Tirupur industries; job losses mount

Chennai, Jan 17
Once among India’s most vibrant industrial hubs, Coimbatore and Tirupur are facing one of their toughest phases in recent decades as steep tariff hikes imposed by the United States continue to take a heavy toll on jobs and exports.

The twin cities, which together provided livelihoods to several lakh workers from Tamil Nadu and other states, have been struggling since the US raised tariffs on Indian goods to 50 per cent in August last year.

Industry sources estimate that job losses have already crossed two lakh in the textile and engineering sectors combined. If allied industries such as castings, pumps and industrial valves are also included, the total number of people affected is believed to exceed three lakh.

Factory closures, reduced shifts and shrinking order books have become common, particularly among small and medium exporters. The impact has been equally severe on exports.

According to Dhanabalan, vice-president, apparel export operations and business development at a private mill, annual textile exports from Coimbatore and Tirupur to the US market earlier stood at around $1.7 billion. “Today, that figure has come down by nearly a billion dollars,” he said.

“If the 50 per cent tariff on Indian products continues, textile exports to the US could become virtually nil within a year.”

Industry leaders point out that the headline tariff is not the only burden. In addition to the 50 per cent levy, exporters face other standard duties, all of which are reflected in the delivered duty paid (DDP) price.

This sharply increases the final cost of Indian products in the US market. In comparison, competing exporters such as China and Bangladesh enjoy a cost advantage of nearly 30 per cent on DDP terms, making Indian goods far less competitive.

Concerns have deepened following reports that US President Donald Trump is considering a proposal to impose a 500 per cent tariff on countries that continue to purchase Russian oil.

“When a 50 per cent tariff itself is unthinkable, a 500 per cent tariff is practically impossible to absorb,” Dhanabalan warned.

“If such a proposal is implemented, exports to the US will decline further, and job losses will rise sharply.”

With uncertainty clouding the US market, exporters are urging the Indian government and industry bodies to aggressively strengthen alternative destinations.

“The European Union and the UK should be prioritised as key markets going forward,” Dhanabalan said, adding that diversification is now critical for the survival of the region’s export-driven industries.

As global trade tensions escalate, the future of Coimbatore and Tirupur’s industrial workforce hangs in the balance.