US' 50% tariff on India threatens Panipat's textile jobs & exports

According to industry sources, towel manufacturing units are mostly dependent on the US market. These towels are primarily made from cotton comber. With the 50 per cent tariff in place, neither US-based importers are willing to bear the additional cost nor can Indian exporters afford such deep price cuts. At the earlier 25 per cent tariff, both sides managed to absorb the burden to keep trade running, but the situation has now become unsustainable.

Ankur Bansal of Himsagar Textiles Private Limited, a recycled yarn producer, told Fibre2Fashion, “The actual crisis will be visible next month as the 50 per cent tariff came into effect only in the last week of this month. The entire home textile industry is in shock. The hikes will leave thousands of workers unemployed. Factories had already scaled down production before the tariff, anticipating a dent in exports. Retrenchments had started earlier, but large-scale job losses will surface next month.”

Vinod Kumar, chairman of the Haryana Chamber of Commerce and Industry (Panipat Chapter), recently informed the media that Panipat’s home textiles and handicraft exports are valued at around ₹20,000 crore, of which 60 per cent go to the US. The 50 per cent tariff, he warned, will have a disastrous impact on the industry.

It is worth noting that Panipat witnessed a record surge in home textile exports during the COVID-19 period, encouraging investors to set up more factories. However, in subsequent years, the industry has faced sluggish demand due to overcapacity and limited export growth.

In recent years, garments have emerged as another consumer segment for recycled yarn, especially as sustainable clothing gained traction as an eco-friendly initiative. This helped absorb some of the additional production capacity. Still, the new US tariff has created unprecedented challenges for the cluster.

An exporter remarked that exploring new markets, as suggested, is not easy. Initially, exporters have little choice until they secure new buyers. Finding and establishing fresh markets will be a long and difficult process.

ALCHEMPro News Desk (KUL)