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NewDelhi, The Indian apparel industry has been thrown into turmoil after former US President Donald Trump imposed an additional 25% tariff on Indian goods, taking the total tariff burden to a staggering 50%. The move—meant to penalise India for continuing oil imports from Russia—has sent shock waves through export hubs like Tiruppur, Noida and Gurugram, with leading exporters facing mounting pressure from American buyers to either absorb the cost or move production overseas.

One of India’s largest garment exporters, Pearl Global, which supplies to major US retailers including Gap, Kohl’s, Amazon, and Walmart, has begun fielding late-night emergency calls from clients. “The message is blunt—either shift production out of India or bear the cost,” said Managing Director Pallab Banerjee in an interview with Reuters.

As a damage-control measure, Pearl has offered to reroute manufacturing to its overseas units in Bangladesh, Vietnam, Indonesia, and Guatemala—countries unaffected by the US tariffs.

India’s Export Advantage Erodes

India had briefly gained a competitive edge earlier this year when the US imposed lighter tariffs on Indian garments compared to competitors like Bangladesh and China. Many saw it as a strategic opportunity to expand India’s footprint in the $16 billion US apparel import market. But that window has now slammed shut.

With the new tariffs, Indian exporters face a 50% levy, compared to 20% for Bangladesh and Vietnam, and 30% for China. The first 25% duty kicked in on August 7, while the second tranche is set to take effect on August 28.

The policy reversal has severely dented India’s standing with key clients, some of whom have already halted new orders. According to a NDTV report, retail giants like Walmart, Target, and Amazon have paused sourcing from India.

Domestic Exporters Under Severe Strain

For exporters like RichaCo Exports, which operates 25 factories across India and supplies exclusively to the US market—including clients like J Crew Group—the situation is dire. “We’re exploring setting up a base in Kathmandu,” said General Manager Dinesh Raheja, noting that 95% of their revenues come from US orders. “The industry is in the doldrums.”

Titan, India’s largest jewellery and watchmaker, is reportedly considering shifting part of its production to the Middle East to maintain preferential market access in the US.

Raymond, a major apparel player, is pinning hopes on its manufacturing facility in Ethiopia, where US tariffs are still just 10%. “We could add more production lines there within three months,” said CFO Amit Agarwal.

Panic in Tiruppur

The industrial town of Tiruppur, which accounts for nearly one-third of India’s garment exports, is witnessing panic. Exporters who were previously bullish are now scrambling to push shipments before the second phase of the tariff kicks in.

“Some buyers have already put orders on hold,” said Naveen Micheal John, Executive Director at Cotton Blossom India, a leading knitwear exporter. “Others are urging us to dispatch whatever we can before the full tariff comes into play.”

The region had once hoped to capitalise on Western buyers diversifying supply chains away from China and politically unstable Bangladesh. Now, it faces the threat of large-scale order cancellations and long-term production shifts.

Make in India Takes a Hit

The exodus of manufacturing threatens to undermine Prime Minister Narendra Modi’s flagship ‘Make in India’ initiative. While companies with offshore facilities may weather the storm, small and mid-size exporters with India-only operations are vulnerable to severe business losses and layoffs.

The government has called the US decision “extremely unfortunate” but has not yet announced any countermeasures. A diplomatic response may be complicated by New Delhi’s strategic balancing act between the West and Russia.

Outlook: Reshaping Supply Chains

The apparel industry’s crisis mirrors a broader recalibration of global trade networks, with geopolitics increasingly shaping commercial decisions. India’s garment sector, which employs over 12 million people, now faces the dual challenge of recovering from tariff shocks and rebuilding trust with global clients.Exporters are urgently calling for government intervention—whether in the form of direct trade talks with the US or support schemes to cushion the industry’s losses. Without swift policy and diplomatic efforts, India risks losing a hard-won edge in the global apparel race. (Including Agencies inputs)