Karur textile units scale down weekly operation due to poor orders from the U.S.

Textile exporters from Karur, who are hit hard by high tariffs imposed by the United States of America, have introduced four-day to five-day work schedules in a week so as to cut down the overheads.

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. 

According to industry sources, 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.A. and the European Union. The cluster employs about 2 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, the 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 textile units in Karur usually close for a day on Sundays, thereby workers getting one day weekly off. However, the dwindling orders from the U.S.A. have forced the exporters to run their units only for five days or four days a week. It has eventually forced the workers to lose at least one to two day wages in a week.

“We love to run our units, both men and machines, to their optimum level. But, the poor export order, mainly from the U.S.A., has forced us to scale down the production. Some companies operate five days in a week, others prefer to operate from Monday to Thursday,” says P. Gopalakrishnan, president, Karur Textile Manufacturers Association.

He said that the exporters had managed to float their business for the last five months by clearing their earlier orders from the US. The exporters had hardly received fresh orders from the US in the second and third quarters of the current fiscal. After a long vacation on account of Christmas, the businesses in the US had just now begun their operation. The real impact of high tariffs would be known during the last quarters of 2025-26.

Another exporter said a section of exporters had faced liquidity crisis to an extent. Many of them had availed working capital loans to tide over the crisis. The Union government’s intervention, after the high tariff regime, had helped them to have a better working capital management. However, it would not support them in the long run.

Mr. Gopalakrishnan added that the Union government should finalise the India-US trade deal to sustain the operations, protect jobs, and maintain global competitiveness. Otherwise, the exporters would lose the buyers’ base.