Trump’s 50% tariffs shrink ‘textile city’ Panipat’s exports

The Panipat handloom export industry is facing unpredictable times owing to global uncertainties — especially after the imposition of 50 per cent tariff on Indian goods by US President Donald Trump.

Already facing turbulence for the last three years due to the Russia-Ukraine conflict; disturbances in the European markets; and the Gaza conflict, exports of ‘textile city’ Panipat have witnessed an over 40 per cent decline due to Trump’s tariffs.

Exporters here do the most business with the US is the summers, but the season was particularly hard for traders this year.

No new orders are being received from US-based buyers, and Panipat exporters have started searching for other markets for their products.

Panipat is globally recognised for its handloom products — its textile industry has an annual turnover of Rs 60,000 crore, of which exports account for around Rs 20,000 crore.

Significantly, the US holds 60 per cent share in Panipat’s export business. Many products made here are sold by US retail giants such as Walmart, Target, Costco, and Kroger.

In April this year, Trump announced the imposition of 26 per cent tariff on Indian goods — the number, however, was later negotiated down to 10 per cent, bringing some momentary respite to Panipat exporters.

However, the US President delivered yet another shock to the Indian industries, the biggest one so far: The US imposed 25 per cent tariff on Indian goods (from August 7), and imposed an additional 25 per cent tariff duty on India as penalty for importing Russian crude oil.

The new tariff, amounting to 50 per cent, came into effect on August 27. It has badly hit business for Panipat exporters.

Exporter Surender Mittal regarded the current times as the hardest in the history of Panipat’s export business. Since the 50 per cent tariff was imposed, exporters and US buyers had no option but to “wait and watch”, he said.

No new orders had been received from US buyers due to instability in the market, Mittal added.

Vinod Dhamija, chairman, Haryana Chamber of Commerce and Industries, Panipat chapter, said enquiries from US-based buyers had shrunk to 10-20 percent only.

Some export houses had started shunting out their employees, he claimed.

Now, Panipat’s export business was being given to industries in Bangladesh, Vietnam, Pakistan, Turkey, China and Egypt — a big setback for stakeholders, Dhamija added.

Thanking the Centre for the GST rejig, Dhamija said the government had provided oxygen to the tariff-hit industries.