Trump’s 50% tariff battered Panipat exports

Globally known as the ‘Handloom City’, Panipat’s textile and handloom industries endured a difficult year, with US President Donald Trump’s imposition of a steep 50% tariff emerging as the biggest setback for exporters.

Already under pressure for the past three years due to the Russia-Ukraine war, inflation, disruption in European markets and the Israel-Hamas conflict, Panipat’s export-driven industry suffered another shock when the US sharply raised tariffs on Indian textile and handloom products. Nearly 40% of the city’s export business was hit by the decision.

Earlier, Indian textiles faced a tariff of around 10% in the US market. The tariff war began in April this year when Trump announced a 26% duty on Indian goods. After negotiations, it was rolled back to 10%, bringing temporary relief. However, exporters were jolted again in August when the US imposed a fresh 25% tariff from August 1, followed by an additional 25% levy on August 27 as a penalty for India’s import of Russian crude oil, taking the total tariff to 50%.

The impact was immediate. Exporters and overseas buyers, particularly from the US, adopted a wait-and-watch approach, with several orders either deferred or cancelled.

Panipat’s textile industry has an annual turnover of around Rs 60,000 crore, of which nearly Rs 20,000 crore comes from exports. About 500 exporters from the city ship handloom and powerloom products — including bath mats, floor coverings, rugs, carpets, bed sheets, towels, curtains, sofa fabrics, cushions, blankets, mattresses and puffs — to markets across the globe. Almost 60% of this export business is linked to the US.

The tariff hike also intensified competition from rival manufacturing hubs such as China, Vietnam, Turkey, Bangladesh, Egypt and Pakistan in the US market. China dominates across product categories, Vietnam leads in garments, Turkey in carpets and towels, Bangladesh in garments, Pakistan in bed sheets and towels, and Egypt in carpets and garments. Industrialists fear buyers may increasingly shift sourcing to these countries.

Vinod Dhamija, president, Chamber of Commerce and Industries, Panipat Chapter, said the year was particularly challenging. “The year 2025 was not good for Panipat’s exporters as over 40% export business was hit due to the 50% tariff imposed by US President Donald Trump. We are hoping that the issue will be resolved and business will return to normalcy in 2026,” he said.

Apart from the tariff shock, industrial safety remained a concern, with around 50 major industrial fire incidents reported in the city during the year.

Despite the export slump, Panipat earned global recognition for sustainability. On July 14, during the 120th episode of ‘Mann ki Baat’, Prime Minister Narendra Modi praised Panipat for emerging as the world’s largest textile recycling hub. The city produces over 30 lakh kg of yarn daily by recycling discarded clothes in nearly 200 spinning mills, without using chemical dyes or wasting water, setting an example for other cities.