Tamil Nadu says US tariffs wiped out $1.8 billion in export orders

US tariffs have already erased export orders worth ₹15,000 crore, or about $1.8 billion, from Tamil Nadu’s manufacturing hubs, Chief Minister M.K. Stalin warned Prime Minister Narendra Modi in a letter, urging urgent diplomatic engagement with Washington to stem job losses and production cuts.

In the letter dated 18 December, Stalin said garment exporters in Tiruppur, India’s largest knitwear cluster and a major supplier to US retailers, have seen confirmed orders cancelled or deferred following the imposition of 50% US tariffs on select Indian exports.

He said several factories have already cut output by as much as 30%, with the slowdown beginning to cascade through ancillary units, logistics providers, and job-linked services.

Tiruppur alone accounts for a large share of India’s cotton knitwear exports and employs hundreds of thousands of workers directly and indirectly.

Exporters there typically operate on thin margins and long lead times, making them particularly vulnerable to abrupt tariff shocks that force overseas buyers to renegotiate prices or shift sourcing to lower-cost alternatives.

Stalin warned that the fallout is spreading beyond apparel. He flagged mounting stress in leather and footwear clusters in Vellore, Ranipet, and Tirupattur, districts that form the core of Tamil Nadu’s leather export ecosystem and are among India’s most labor-intensive manufacturing centers.

Prolonged tariff pressure, he said, risks triggering layoffs and factory shutdowns in sectors where wage employment has few immediate substitutes.

The chief minister also pointed to daily revenue losses of roughly ₹60 crore across western Tamil Nadu hubs including Tiruppur, Coimbatore, Erode, and Karur, as US buyers pause or pull back on new orders amid pricing uncertainty.

Exporters, he said, are increasingly unable to absorb the cost impact or pass it on without losing contracts.

In his letter, Stalin framed the tariff shock as a national export and employment issue, not a state-specific problem.

He urged the Centre to treat the matter as an urgent priority in India–US trade engagement, warning that sustained disruption could weaken India’s position in global supply chains at a time when manufacturers are already grappling with volatile demand, high input costs, and shifting sourcing strategies.

The appeal comes against the backdrop of strained global trade conditions, with the US using tariffs more aggressively as a policy lever and supply chains becoming more sensitive to cost changes.

Labor-intensive exporters such as garments and leather have historically been among the most exposed to such measures, given their dependence on price competitiveness and long-term buyer relationships.

India has previously sought relief through bilateral discussions and diversification into non-US markets, but the US remains a critical destination for Tamil Nadu’s export economy.

Industry groups have warned that prolonged tariff uncertainty could push buyers to lock in alternative sourcing arrangements elsewhere, making lost orders difficult to recover even if duties are later eased.