Existence of textile exporters in danger due to tariff; Tirupur most affected, orders worth Rs 40 billion cancelled
The 50 per cent tariff imposed by the US has increased the difficulties of the Indian textile industry. Exporters are not able to bear the impact of the tariff. In such a situation, the textile industry needs immediate incentives. According to the report of MK Research, the earlier imposed tariff has led to a decline in the margins of the textile industry. The additional tariff will further reduce the margins of the industry, which is struggling to remain competitive in the global markets.
According to the report, the textile industry is not getting new orders from the US due to high tariffs. Old orders are also being cancelled, due to which inventory is increasing. In such a situation, government help is necessary for the industry and especially micro, small and medium enterprises (MSMEs), because their books are not as strong as those of large exporters. The industry needs fiscal incentives to bear the tariff shock and remain relevant in the global supply chain. If necessary steps are not taken immediately, not only will the existence of small companies be in danger, but a large number of jobs will also be lost.
Tirupur most affected, orders worth Rs 40 billion cancelled
The Tirupur cluster, which has a 55-60 percent share in the country's knitwear exports, is badly affected by the tariff. Clothes worth about Rs 700 billion are exported from here. Due to the tariff, orders worth about Rs 40 billion that Tirupur used to get from the US have been cancelled.
India has about four percent share in the global textile market, which is much less than Bangladesh (13 percent) and Vietnam (9 percent).
Pressure due to these reasons too
Payments are getting delayed by US retailers.
Rising inventory has created additional pressure on domestic companies.
MSMEs are extremely vulnerable to barriers in international trade.
Due to implementation challenges in free trade agreements, its full benefit is not being received.
Tirupur most affected, orders worth Rs 40 billion cancelled
The Tirupur cluster, which has a 55-60 percent share in the country's knitwear exports, is badly affected by the tariff. Clothes worth about Rs 700 billion are exported from here. Due to tariffs, Tirupur has lost orders worth about Rs 40 billion from the US.
India has a share of about four per cent in the global textile market, which is much less than Bangladesh (13 per cent) and Vietnam (9 per cent).
There is also pressure due to these reasons
* Payments are getting delayed by US retailers.
* Rising inventory has created additional pressure on domestic companies.
* MSMEs are extremely vulnerable to barriers in international trade.
* Full benefits are not being reaped due to implementation challenges in free trade agreements.
