Textile exporters from Karur have heaved a sigh of relief over the trade agreement between India and the United States.
According to industry sources, the U.S. remains one of the largest markets for Indian textiles. Home textile exports originate from the Karur cluster, which has earned a reputation for quality and reliability over decades of trade relationships, and constitute a significant share of the country’s exports. The total annual manufacturing value of Karur cluster is pegged at ₹9,000 crore. Of this, exports constitute ₹6,000 crore, predominantly to the U.S. and the European Union. The cluster employs about two lakh people in production of home textiles such as bed linen, table covers, kitchen cloths, mats, and sofa covers.
Since the U.S began imposing 50% higher tariffs on Indian goods from August, the exporters have begun to feel the heat. Shortly after the new tariff regime came into effect on August 27, customers based in the U.S. demanded heavy discounts for the orders placed before August. Several buyers chose to cancel the orders. In order to ensure routine function of the companies many exporters offered special discounts to their products. However, except for a few, many exporters received nil orders since September, thereby forcing them to trim down the production by introducing a partial lay off system. The dwindling orders from the U.S.A. forced the exporters to run their units only for five days or four days a week. It eventually forced the workers to lose at least one to two day wages in a week.
When the situation began to leave a lasting impact on the overall growth of the textile exporters from Karur, the Union government has finalised the India-US trade deal. It has also been announced that the US tariff on several goods will be brought down to 18%. It has been received well among the exporters.
“It is a historic milestone in strengthening bilateral trade relations and significantly enhancing the competitiveness of Indian exports in the US market. The reduction of reciprocal tariffs from earlier levels of around 50% to 18% is a major game-changer, particularly for Indian MSME exporters,” said P. Gopalakrishnan, Regional Chairman, Federation of Indian Export Organisations (FIEO).
He added that the tariff rationalisation would benefit key export sectors such as textiles and apparel. Lower tariffs would improve price competitiveness, facilitate deeper integration of Indian exporters into US supply chains, and restore buyer confidence.
S. Sukumar, secretary, Karur Textile Manufacturers and Exporters Association, said the trade deal was expected to result in immediate release of orders that were earlier kept on hold, especially in labour-intensive sectors such as textiles and apparel. The exporters had begun establishing contacts with the trade partners in the United States.
Published – February 04, 2026 04:48 pm IST
