COIMBATORE: The US tariff hike that comes into effect from Wednesday could result in a business loss of up to Rs 2,000 crore per month, anticipate knitwear exporters from Tirupur.

“Up to 80 per cent of business to the US will be affected by the imposition of a 50 per cent tariff hike. From next month, exporters may suffer a business loss of up to Rs 2,000 crore per month. Currently, fresh orders and those in the ‘sampling stage’ have been put on hold. Our business may reach stability only if the tariff hike gets a pause,” said Kumar Duraiswamy, an exporter and joint secretary of Tirupur Exporters Association (TEA).

In the last financial year, knitwear exports from Tirupur witnessed a robust growth to Rs 44,747 crore from Rs 33,400 crore in the 2023-24 financial year. About 40 per cent of the exports from Tirupur is to the US.

“With the current tariff, India may stand to lose to competitors like Bangladesh, Cambodia, Vietnam, Sri Lanka, and Pakistan. As most exporting units are running on wafer-thin margins, they cannot withstand the impact of the tariff hike,” he added.

Another knitwear manufacturer, requesting anonymity, claimed that almost 80 per cent of manufactured goods in Tirupur have stagnated due to the hike. “Exports have come to a standstill over the last fortnight. Goods worth almost Rs 1,000 crore have been produced, and those under production have stagnated. Many units have started declaring forced holidays unable to pay wages, in the wake of the crisis. The US buyers have not cancelled orders out of hope that the hike may be rolled back,” he said.

It may take at least three months to tap alternative markets like the UK, where a free trade deal comes into effect in November.

“In the current scenario, there should be policy interventions from the government to avert job loss, prevent production halts, explore alternate markets, retain existing customers, and safeguard textile manufacturing units,” he added.

Tirupur, which contributes about 68 per cent of India’s knitwear exports, employs one million people, of which 65 per cent are women. There are about 2,500 exporters and 20,000 units in the district, comprising knitting, printing, compacting, and labelling.