Karur textile exporters anticipate tough time due to high tariffs

Home textile exporters from Karur foresee a tough time ahead due to the trade tension between India and the USA following the imposition of 25% import duty, plus penalty, on goods from India.

According to industry sources, the value of exports of home textiles such as bed linen, table covers, kitchen cloths, mats, sofa covers, is about ₹2,000 crore per annum. It constitutes 30% to 35% of the total value of exports from Karur. Nearly 200 exporters focus mainly on U.S. markets.

At present, most of the home textile items attract import duty between 3.5% to 12%. There are exporters who export through e-commerce platforms that attract no import duty up to consignment value of $800. With the United States imposing higher tariffs, the exporters fear that they will feel the heat of declining export volume in the near future. To avoid higher tariffs, the exporters have taken extra efforts to book the items, which are at ports and transit shipments, as early as possible.

“We anticipate a tough time as consumers will think twice before buying any product that is priced at 25% more than the existing price. The importers will naturally avoid goods that attract higher import duty and look for other options. Our priority is that the current volume of exports should not be affected,” says R. Gopalakrishnan, Karur Textile Manufacturing and Exporters Association.

N. Senthil, an exporter from Karur, says the situation is fluid. Most buyers are taking slow decisions in placing fresh orders due to the uncertainty. It has been the scenario since June. A clear picture would emerge at the end of August.

V. Ashok Ramkumar, managing director of Asian Fabrics Pvt Ltd., said the situation was being closely watched. The U.S.-based buyers had not placed orders but for some high demand items. They were following a “wait and see” approach.

However, exporters sound optimistic that there is a value for cotton based Indian products among the buyers in the US. But the volume of export may come down if the new tariffs are not brought down or rationalised.

Mr. Gopalakrishnan said the current situation had forced the exporters to demand the reintroduction of interest subvention scheme. The demand had already been made to the Central government.