Tariffs may cripple 80% of India’s apparel exporters

Unable to bear the burden of 50 per cent reciprocal tariff, an estimated 80 per cent of the small Indian apparel exporters supplying to the US are expected to incur losses and get wiped out, while bigger players will be forced to offer discounts and hunt for alternate export markets, say exporters. No exporter, be it big or small, will be able to absorb such high tariffs. Many of the smaller exporters with a low financial base and reserves will be wiped out, as buyers have started cancelling orders and are refraining from placing new orders,” Sudhir Sekhri, chairman of Apparel Export Promotion Council (AEPC), the official body of apparel exporters in India, told in a telephonic interaction, on Thursday. “Out of the total exporters we have, 80 per cent of exports is done by 20 per cent of the exporters, while 20 per cent of the exports is done by 80 per cent of the exporters which are micro and small ones. So 80 per cent of the exporters will not be able to bear the losses and may have to wind up,” he added. He also pointed out that buyers in the US have categorically told Indian exporters that they will move some of the orders out of India to destinations like china. “Big exporters will be able to with stand the crisis for the next four months. They will be able to absorb the losses for some time. But even they will find it difficult after this period as they will have to bear the brunt of these tariffs,” Sekhri added. It could lead to the closure of textile units and mass layoffs fear exporters. “If this additional 25 per cent tariffs is imposed, buyers will move sourcing out of India, many layoffs and even closure of some units can happen ,and this will create a catastrophe for the textile industry,” said Thirukkumaran Natarajan , Chairman of the Tiruppur – based Esstee Exports India Pvt Ltd.