Fast forward to today, the Trump administration's announcement of tariff rollback for Indian goods (from 50% to 18%), combined with the recent India-EU free trade agreement (FTA) and Union budget announcements, has brought immense relief to the 3,200-odd knitwear manufacturers in Tiruppur, alleviating their concerns about the impact on trade.

Relief For Exporters

The recently announced US-India trade deal assumes significance for Tiruppur as the US constitutes close to 40% of the total exports (of knitwear products) from the city.

After the Trump administration imposed a whopping 50% tariff on Indian goods last year, the US orders had reduced by 60%-70%.  

Normally, it takes 45-90 days for the execution of an export order. By the time Trump announced punitive tariffs, many orders were already in the pipeline. So, the shipments continued till October, but with reduced margins. Post October, only a few importers continued with orders

— Kumar Duraiswamy, Joint Secretary, Tiruppur Exporters' Association (TEA)

It is a different ball game altogether now, he says. 

With an 68% share, Tiruppur leads the knitwear exports in the country. According to TEA data, in the FY2025-26, the city registered knitwear production worth ₹74,747 crore. The exports were worth ₹44,747 crore, while domestic sales were close to ₹30,000 crore.

According to M.P. Muthurathinam, president, Tiruppur Exporters' And Manufacturers' Association (TEAMA), about 40% of the units were shut following the US tariffs.

About 750 to 1,000 units have closed down, and bank NPA [non-performing assets] have risen

— M.P. Muthurathinam, president, TEAMA

The punitive tariffs proved to be a wake-up call for the manufacturers in Tiruppur. With doors to the US market shut, they explored other markets. They are now wary of relying solely on US buyers.

In the past few months, we explored markets in Europe, Africa, Dubai, and Israel. We also found buyers there. We will continue to serve them even after the relaxation of tariffs. Earlier, we were so occupied with orders from the US that we did not make any effort to diversify trade

— Prabhanand Easwaran, Managing Director, Kalanjiyam International

Meanwhile, exporters also highlighted that the trade momentum stayed flat despite diversification of markets in the wake of the punitive US tariffs. “With the export pie remaining the same, we were competing domestically,” stated Duraiswamy.

“We do not know when the FTA with the EU will come into effect. It might take time, at least a year. So, the US market is critical for us,” said a person from the industry, on the condition of anonymity. 

Global Competitiveness

Welcoming the reduction in tariffs, Ashwin Chandran, Chairman, Confederation of Indian Textile Industry (CITI), said in a press statement that the reduction in tariffs will ensure global competitiveness for the textiles and apparel exporters. 

"This deal will also ensure that the factories run at full steam again, and job creation will also get back on track," Chandran said.

Exporters are now awaiting the fine print since the trade deal announcement was made only on social media.