Ludhiana, India – On the floor of the Ludhiana spinning mill, 29-year-old Pankajikumar stands at the station. His fingers tie loose threads and feed the spinning wheels. The thread will soon head to the city’s textile factory. The factory produces wool knitwear, socks and other clothing, many of which are aimed at the US.
Kumar has worked in different spinneries for nearly a decade, but for the past four months this has been his living, bringing 18,000 rupees ($203.87) a month. But now that President Donald Trump slapped India with 50% tariffs, Kumar’s income is uncertain. “I don’t know,” he says. “The owners of the factory said they didn’t know how much they should produce in the next few months. They may not need me.”
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Rajesh Kumar, who manages the unit, told Al Jazeera that the thread order plunged at just 30% in just two weeks after the US had charged 50% tariffs on Indian goods.
“The local textile mills we supply say there is uncertainty about future US orders,” he said. “We can’t plan for new production until that’s clear.”
India has accused the tariff hike of “unfair” and “unfair.” However, the shock has already spread through textile units across the country. The sector contributes approximately 2.3% to India’s Gross Domestic Product (GDP), 13% of industrial production and 12% of total exports. It is also the second largest employer after agriculture, providing direct work to more than 45 million people, many of whom are women and members of the rural workforce.
This blow is particularly sharp as the industry relies heavily on the US, one of India’s largest textile and apparel markets. In 2024, India provided roughly 6% of US apparel imports, worth $4.8 billion. This accounts for almost a third of the total exports of Indian apparel, and the majority of the broader textile exports.
There are no new orders
Ludhiana, one of India’s largest textile hubs in northwestern Punjab, is particularly exposed. Every year, cities ship around $700 million worth of socks and knitwear, especially Woolen, to the US, and the industry here employs more than 500,000 workers.
Ashwin Aggarwal, head of clothing exports at Nahar Industries, which supplies brands such as Gap, Tommy Hilfiger and Phillips-Van Heusen Corp, says clothing exports worth around $35 million to $40 million a year. Business has slowed dramatically since the 50% tariffs came into effect, he said.
“We haven’t received any fresh orders since the announcement,” he said. “The small brands that we were sourced from us already say they don’t put orders. Large brands that are tied to longer contracts will at least end their current production cycle, but claim they will absorb 25% of the tariff burden.
Trump’s previous tariff proposal in April – launched with a universal duty of 10%, setting India’s rate at 26%, lower than rival clothing hubs such as Bangladesh, Vietnam and China, temporarily raising hopes that India could expand its US apparel market share of $16 billion. However, India is currently at the highest tariff level, while Bangladesh and Vietnam currently have collapsed by 20%, Pakistan 19% and China 30%.
The Industrial Federation of India (CII), an industrial group, has warned that tariff hikes could be devastating. Amit Thapar, chairman of the CII’s Northern Regional Export Promotion Committee, described the move as “not just a dent in our interests, but a confession of death for competitiveness and survival.”
Thapar pointed out that even the raw materials provided by Indian companies from overseas are being faced with these taxes, even when they are used in their products. He added that the measure appears to be a form of punishment and raises serious concerns about the potential disruption to supply the chain.
Ludhiana is far from the only city in danger. Other textile-rich hubs such as Tiruppur, Panipat, Surat, Bikaner and Coimbatore also face precarious conditions.
One of the world’s largest fiber recycling hubs and India’s largest supplier of blankets, carpets and harsh threads, Panipat in Haryana has an export turnover rate of around Rs 200 billion ($2.2 billion). Of this, home textiles alone account for approximately 120 billion rupees ($1.3 billion) in annual sales to the US, accounting for approximately 60% of the city’s total exports.
Rakesh Kumar Goyal, which operates an industrial unit in Panipat, supplies materials such as towels, cushion covers, rugs and other products primarily to Brazil and African countries, and has had exploratory discussions to supply US retailers such as Walmart, Ikea and H&M Home. But these plans are now screeching.
“If tariffs are in place, US suppliers will launch reconnaissance for other markets we may have now, and that will only strengthen the competition for us,” he says.
Vinod Dhamija, president of the Haryana Chamber of Commerce and Industry, said: “Currently, some industry owners are considering rerouting their supply chains through countries such as Bangladesh and Vietnam to promote exports to the US. Exporters are planning to set up nesting facilities in these countries and are considering providing minimal value. As they remain intact, this could indicate a major change in their trade strategy.”
“No more shipments”
Thirupur, a southern city in Tamil Nadu, which accounts for 68% of India’s knitwear exports, the order halted when a 50% tax was announced in early August. This blow is particularly cruel as the Tamil Nadu textile belts were actually prepared for the rebound of US demand for the background of the first round of higher tariffs in other countries. Many exporters were investing in new machinery, anticipating a surge in orders, including the India-UK Free Trade Agreement.
But it’s all gone.
Kumar Durisamy, co-secretary of the Tiruppur Exporters Association, told Al Jazeera that he gave suppliers a deadline when the 25% tax was announced, asking them to ship anything ready by August 27th, and asking them to absorb some of the tariffs, terms they agreed to. However, an additional 25% meant that the order was effectively put on hold.
Tamil Nadu Prime Minister MK Stalin has called for urgent intervention to Prime Minister Narendra Modi as the state has a high dependence on the US market for exports.
Most of these workers are family-based, many are women, and at the end of the production chain, said Mary Anukratham, Tirupur’s social awareness and self-education. “While there is no immediate impact on home workers yet, the coming months could be devastating if tariffs are maintained.
Tappal said that even if the government is unable to protect its profits, some form of support is essential to prevent losses and layoffs. He warned that without timely intervention there is a real risk of unemployment across the country’s textile hub.
