Karnataka's Textile Industry Faces Short-Term Strain Amid U.S. Tariff Shock

(MENAFN- KNN India) Bengaluru, Aug 29 (KNN) Karnataka's textile sector is preparing for a tough patch following the implementation of a sweeping 50 percent tariff on Indian garment exports by U.S. President Donald Trump, effective Wednesday.

Some labour-intensive units are likely to be severely affected, with disrupted production plans and concerns over job losses surfacing amidst plummeting U.S. demand.

M.G. Balakrishna, President of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), said that while the tariff's immediate repercussions will hit garment makers, fabric manufacturers in the state may fare better.

“Fabric will still be in demand-even if garments are made in Bangladesh, Vietnam, or Cambodia,” he noted, citing India's strong raw materials base.

Balakrishna also pointed out that competing markets such as Vietnam and Bangladesh lack the necessary infrastructure to absorb the sudden surge in U.S. demand.

Additionally, countries like Oman, which hold zero-duty trade agreements with the U.S., could serve as transit points, strengthening collaboration with Indian exporters.

Experts urge calm, suggesting that the impact may prove temporary. Karnataka's textile sector is encouraged to look toward diversification-tapping into domestic demand, benefiting from policy support such as export incentives, and leveraging rupee-denominated or duty-free trade links to buffer the shock.

In short, while Karnataka's garment hubs face an inevitable short-term setback, the resilience of the fabric-producing base and strategic policy interventions could help soften the blow and restore stability in the near future.

(KNN Bureau)

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