Double whammy for Ludhiana knitwear cos as European buyers rework terms of orders

India’s biggest woollen knitwear market in Ludhiana is facing a double whammy as Trump tariffs have rolled out – exports to US have become untenable and European buyers are driving a tough bargain and renegotiating the terms of their orders.

The United States has always been the biggest customer of woollen knitwear, synthetic yarn and activewear from Ludhiana. With Trump tariffs of 50% in place, Ludhiana’s exports are severely impacted. The exporters are watching the situation hoping that like China, they get a 90-day reprieve. At the same time, they are saddled with spare capacities. Amit Jain, chairman of Confederation of Indian Industry (CII) Punjab told ET, “The world knows that Indian garment and textile market will face the tariffs. Even as they are losing business, the European buyers are now haggling on per unit cost. There is uncertainty which means that if the exporter renegotiates with Europe and then US comes around, he will be in a precarious situation.”

Amit Thapar, chairman of CII’s Northern Region Export Promotion committee, said the exporters are flip flop by US over Trump tariffs has cost them business. “The European customers are asking for obnoxious discounts now. But we are still ok to work at no profit-no loss basis,” said Thapar adding, “The situation is tense. We are saddled with spare capacities and cannot change gears suddenly and get orders.”


Thapar owns a company with a Rs 1,000 crore turnover and which exports crocheting and industrial yarns. He said the exporters were going by US’ April statements which made them feel that the maximum tariff would be 15%.

“With such statements, our customers sent their product development teams in May and the market shifted from China. May-June was boom time for us but by June 17 everything had changed,” said Thapar, who is now renegotiating with his buyers.

The industry is now looking towards the Centre to bail them out. Thapar said the government should sign an FTA with EU as soon as possible. “The government should introduce focused market incentive scheme to save the textile sector,” said Thapar. One of the biggest challenges before companies is to retain their labour force. “There will be layoffs. The exporters are facing a challenging time and retaining their work force will be difficult. In such a scenario, the government should introduce an allowance scheme for workers in textile and garment sector. The owners and government can contribute equally towards this to sustain our workforce,” said Thapar.

Varun Mittal, owner of Kudu knitwear which is a vertically integrated knitting, dyeing and printing company dealing in fashionwear, said, “The domestic garment market is flooded with fabric imported from China and readymade garments from Bangladesh. The government needs to restrict these imports and focus on domestic consumption, something that China does.” He said since US exports are impacted, the exporters will have spare capacity and will be competing with domestic trade companies for a share in the Indian market. “Restricting imports at this time will help the textile and garment sector,” said Mittal.