Tiruppur Garment Exporters Forecast Major Growth Under New India-US Trade Framework
In a significant development for India's textile sector, garment exporters in Tamil Nadu's Tiruppur district are projecting that shipments to the United States will double to approximately ₹30,000 crore over the next three years. This optimistic forecast follows the recent finalization of the first-phase framework for the India-US Bilateral Trade Agreement (BTA), announced on February 7.
Job Creation and Economic Impact
Industry executives cited in the report indicate that this expansion in orders and production could generate nearly 500,000 additional jobs in the region. Tiruppur, located about 450 kilometers west of Chennai, is renowned as a major textile hub in Tamil Nadu, and this trade agreement is expected to catalyze substantial economic growth.
Exporters Welcome the Agreement
Welcoming the move, KM Subramanian, President of the Tiruppur Exporters' Association, emphasized the deal's significance for the town's future. "The agreement with the US will provide Tiruppur huge growth in the next five years," he stated. Currently, garment exports from Tamil Nadu are valued at ₹15,000 crore, and Subramanian anticipates this figure doubling within three years post-agreement.
He further noted that the impact of the deal is likely to become visible within the next three months, leading to strong growth for India-made garments exported from this textile hub. Another entrepreneur highlighted that the deal would help redirect orders from countries like Bangladesh back to Tamil Nadu, enhancing the region's competitive edge.
Background of the India-US Trade Deal
The trade deal was initially announced by US President Donald Trump on February 2, after months of negotiations. A key aspect involves Washington reducing tariffs on Indian goods to 18% from a previously proposed 50% by August 2025. In exchange, New Delhi has agreed to halt purchases of Russian crude oil, addressing a previous point of contention that led to Trump imposing additional 25% tariffs on Indian goods.
The framework was finalized on February 7, with the deal expected to be signed in March. Commerce Minister Piyush Goyal indicated that it could come into effect soon after the White House issues an executive order.
Key Provisions of the Trade Framework
- New Delhi will purchase $500 billion worth of US goods over the next five years, including energy products, precious metals, and technology items.
- India will lower or eliminate tariffs on all industrial goods, as well as US farm and food products such as dried distillers' grains, red sorghum for animal feed, tree nuts, fruits, soybean oil, wine, and spirits.
- Washington will impose 18% tariffs on Indian goods, including apparel and textiles, leather and footwear, organic chemicals, and artisanal products.
- Tariffs on some aircraft and aircraft parts from India will be removed by the US.
- Both sides will continue negotiations under the BTA to further open markets, with Washington considering New Delhi's requests for lower tariffs on Indian goods.
This agreement marks a pivotal step in strengthening bilateral trade relations, with Tiruppur poised to become a major beneficiary in the textile and garment export sector.
