NextFin news, On Friday, October 3, 2025, President Donald Trump’s administration implemented a 50% tariff on apparel imports from India, threatening the survival of Indian factories supplying major US retailers such as Nike and Walmart. The tariffs, part of Trump’s so-called “Liberation Day” trade measures, have caused significant distress among Indian garment manufacturers, especially in Tiruppur, India’s knitwear capital.
Factories in Tiruppur, which had invested heavily in new machinery and expanded production capacity anticipating increased orders from the US market, now face mounting debts and unsold inventory due to the sudden tariff hike. R.K. Sivasubramaniam, managing director of Raft Garments, revealed that his factory, which produces millions of low-cost underwear units for the US market, is struggling under the weight of a $2 million bank loan taken to finance new equipment.
The tariffs were announced by President Trump earlier this year as part of a broader strategy to impose reciprocal tariffs on trading partners, aiming to protect US industries. Indian exporters were initially optimistic due to Prime Minister Narendra Modi’s close ties with Trump, expecting favorable trade terms. However, the 50% tariff far exceeds those imposed on competing apparel exporters like Vietnam and Bangladesh, severely undermining India’s competitiveness.
The tariffs have been described as punitive measures linked to geopolitical tensions, including India’s ongoing energy purchases from Russia, which the US opposes. The secondary tariffs aim to pressure India into aligning more closely with US foreign policy objectives.
Industry experts warn that the tariffs could lead to widespread factory closures and job losses in India’s apparel sector, which heavily depends on exports to the US. The sudden increase in costs makes Indian goods prohibitively expensive for American retailers, who may shift sourcing to other countries with lower tariffs.
As of October 3, 2025, no immediate relief or negotiation plans have been announced by either the US or Indian governments. The tariffs remain in effect, casting uncertainty over the future of India’s garment export industry and its role in the global supply chain for major US brands.
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