Relief is expected to begin flowing into India’s key export centres after months of weak demand and job losses triggered by steep tariff increases imposed by the United States, the country’s largest export market. Washington’s decision to sharply reduce duties on Indian goods is likely to ease pressure on labour-intensive sectors such as textiles, raising hopes of a recovery in employment across major manufacturing clusters. Under the deal, US tariffs on Indian goods will be cut to 18 per cent from levels that had reached around 50 per cent.
Industry representatives say the earlier tariff hike had severely strained exporters. According to Prabhu Damodaran, convenor of the Indian Texpreneurs Federation (ITF) in Coimbatore, between seven and ten million people are employed in the textile industry, and although US buyers continued sourcing from India after the tariff increase last year, they did so only by demanding steep discounts. He noted that clusters such as Tirupur experienced sharp demand disruptions, creating uncertainty for both companies and workers. With trade agreements now in place with the EU and the US, he added that every additional US $ 1 billion in exports could generate close to 150,000 direct jobs.
Economists expect order volumes to rebound as buyers return. Mitali Nikore, economist and founder of Nikore Associates, said the Tirupur cluster in Tamil Nadu—which employs around 800,000 workers and exported goods worth nearly US $ 4.79 billion in FY25—could see a significant surge in orders in the coming months.
Exporters are also preparing for higher production. Raja Shanmugam, a Tirupur-based garment and textile exporter to the US and other major markets, said the region sends roughly 30% of its exports to the US, and that rising orders would require increased production and additional manpower.
Small and medium-sized exporters, who were hit hardest by last year’s higher tariffs through margin compression and job cuts, are expected to benefit the most from the rollback. However, despite widespread optimism, the detailed provisions of the agreement have yet to be made public.
Analysts believe the new tariff structure should help India regain competitiveness against rival textile exporters such as Bangladesh and Vietnam. Vijay Vasanth, senior vice-president at HR services firm GI Group Holding, said the textiles sector could see a noticeable increase in hiring over the next 12 to 18 months, particularly in clusters across Tamil Nadu, Gujarat and Maharashtra. He added that as order books stabilise before expanding further, early recruitment is likely to focus on shop-floor roles, quality control, merchandising and supply-chain functions.
