India’s Garment Workers Are Paying the Price for Trump’s Tariffs

Every autumn, the buzz of sewing machines in India’s largest apparel manufacturing hubs, begins to wind down as workers head home for Diwali.

This year, however, the annual exodus came earlier than usual, hastened by hefty American tariffs that shuttered factories and slowed production far ahead of schedule, with no clarity on when work might resume, labour groups working in the country said.

For many workers, the fallout has been swift and devastating.

“The [factories] started telling us to go home for festival holidays and come back once things in America got better,” said Raju B. Chikkanarasaiya, the general secretary at Karnataka State Garment and Textile Workers Union. “They don’t know themselves if it will happen in two or three months, but for us even one month is a lifetime. We can’t survive without wages that long, it has become like Covid again.”

Labour representatives in the state — one of India’s largest apparel manufacturing hubs — say workers at US-focused suppliers have faced furloughs, reduced shifts, cut pay and a freeze on overtime compensation in the months since America imposed a 50 percent tariff on Indian goods in late August.

The move doubled an initial 25 percent duty in retaliation for Indian purchases of Russian crude oil, a revenue source the US has been trying to strangle as it seeks a resolution to the war in Ukraine. The steep duties make India one of the countries worst affected by US President Donald Trump’s trade war.

For many workers, the change feels like a grim replay of 2020. Then, the Covid-19 pandemic collapsed global orders; now, it’s decision-making in Washington DC. Similar ripple effects are being felt to various degrees around the world, as trade-war volatility squeezes apparel supply chains and threatens the livelihoods of garment workers who depend on US demand.

“Ultimately it’s the workers that end up bearing the brunt of the problem,” said Scott Nova, executive director at international labour organisation Worker Rights Consortium.

Life on the Edge

In India’s “knitwear capital” of Tiruppur in the southern state of Tamil Nadu, the shock of US tariffs is rippling across factory floors with particular force.

The region accounts for more than 50 percent of the country’s textile and apparel exports, with more than 40 percent of orders normally headed for US markets, according to Kumar Duraiswamy, joint secretary of the Tiruppur Exporters’ Association.

Most production units in the area are small-scale operations that rely on subcontracting from bigger suppliers for work and have limited resources to weather demand shocks. A large proportion of the regional workforce is made up of migrant labourers, whose lack of local networks make them particularly vulnerable at times of uncertainty.

“They’re the first to lose jobs,” said Janaki S, a leader at the Garment and General Workers Union in Tamil Nadu. “It’s hard because, as migrants, they also have less collective organisation and union representation since they come from all different states and don’t speak Tamil, so factories can fire them without much pushback.”

With many orders from US brands on pause, that’s exactly what’s happening, she said.

While gathering exact data on how workers have been affected is extraordinarily difficult due to the local garment industry’s complex, fragmented nature and the absence of an established system for tracking worker movement, anecdotal reports from unions and workers who spoke with The Business of Fashion point to an increasingly challenging situation.

They said layoffs have become routine in Tamil Nadu’s “dollar-city,” a common nickname for Tiruppur that derives from its sizable exports to America. Some US-dependent factories have shut down entirely, while others remain only partially operational with reduced shifts, they added.

According to estimates from the Asia Floor Wage Alliance, a labour rights organisation which is compiling a report on how US tariffs are affecting garment workers in India, thousands of migrant workers have already left Tiruppur as work dried up.

Some laid off workers have found temporary or piece-rate work in local factories catering to domestic or European markets, others have moved into the agricultural or construction sector, union and trade representatives said.

“It all pays much less than full time employment,” said Janaki. “There’s no security.”

R. Krishna, a worker from Assam, said he was among those who left Tiruppur in early October, well ahead of the normal Diwali holiday, after the factory where he worked closed due to paused orders. Instead of the 12,000 rupee holiday bonus he was expecting for the year’s work, he said he received just 1,000 rupees. It’s unclear if he’ll have a job to go back to.

We “can only return if new orders come in,” he said. For the time-being, he’s relying on daily wage work back in his home town, but it pays less than half of what he used to make working in Tiruppur. “I don’t know how long I can go on like this,” he said.

The region is “the canary in the coal mine,” said Thulsi Narayanasamy, director of international advocacy at the Worker Rights Consortium. “We’re seeing mass layoffs, no severance, no safety net.”

Other regions, where larger, better resourced factories are more dominant have fared better, but exporters of all sizes are still feeling the pressure.

“It’s a complicated situation,” said Anant Ahuja, head of sustainability at Indian apparel manufacturing giant Shahi Exports, which sends 55 to 60 percent of its products to the US. He said the company went through “stages of shock, anger, and problem-solving” before deciding to absorb the 25 percent “Russian oil penalty” the US imposed in late August to protect long-term buyer relationships. “You don’t want to burn that bridge,” he said. “It’s a buyer’s market.”

But that’s not a long-term strategy: Shahi has been operating at a loss for the past few weeks, Ahuja said.

This new crisis lands on a workforce that has been under sustained pressure for years. Labour rights in India’s garment sector have been eroding since the pandemic, with widespread layoffs, stalled wage negotiations, and weak enforcement of protections. Over the past year, USAID cuts and broader economic volatility have compounded those vulnerabilities. For many suppliers, the US remains their single largest buyer, and new or emerging markets simply can’t fill the gap if orders from there dwindle.

Labour groups say even workers at larger factories are still feeling the pinch in a variety of ways. Transport services from hostels have been cut, forcing workers to pay their own way or lose a day’s wage, said Bangalore-based labour union leader Raju B. Chikkanarasaiya.

The Months Ahead

For garment workers in India’s apparel export hubs, the near-term future looks bleak.

Hope that ongoing diplomatic negotiations between the US and India could bring down the 50 percent levy before the end of the year is still months of uncertainty for workers who live paycheck to paycheck.

In a letter to Prime Minister Narendra Modi in August, Tamil Nadu chief minister M.K. Stalin warned that up to three million jobs across the state’s textile sector could be at risk without financial support from the central government.

Exporters have been lobbying for emergency government support since the tariffs were put in place, including extensions on loan terms, quick access to credit and a temporary break on retirement or pension fund taxes they say could safeguard more than one million jobs, two-thirds of which belong to rural women.

The Indian government was expected to announce relief packages in mid-October, according to the Tamil Nadu’s Export Association, but so far no tangible initiatives have been announced.

The situation adds to the uncertainty for a labour force facing an increasingly precarious situation.

”These are people with no savings to fall back on,” said Deepika Rao, head of CIVIDEP, a Bangalore-based labour advocacy organisation. ”Every week without pay is a crisis.”

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