26 Aug 2025 : Several major export hubs in India—including Tirupur, Noida, and Surat—have halted production as the new 50% U.S. tariff regime takes hold, according to the Federation of Indian Export Organisations (FIEO). The stoppage reflects a wave of panic across India’s export sector, which has long depended on the American market for revenue and growth.
Impact Across Key Hubs
Tirupur, known globally as India’s knitwear capital, has seen dozens of small and medium export units suspend operations temporarily. Industry representatives state that U.S. buyers are either canceling orders or seeking steep price cuts to offset higher import costs. With margins already razor-thin, many units say continuing production is no longer viable.
In Noida, a major center for apparel and leather exports, the situation is equally grim. Exporters supplying footwear and garments to top American retail brands have reported order rejections and deferred payments. According to industry associations, many factories are operating at less than 30% capacity, with some considering layoffs if the situation persists.
Meanwhile, Surat’s textile and diamond polishing sectors—which account for a large share of India’s exports to the U.S.—have also slowed down significantly. Exporters in Surat claim that fresh shipments are being delayed or redirected, while finished goods are piling up in warehouses.
FIEO’s Warning
FIEO has raised an urgent alarm, warning that if the crisis continues, thousands of workers could lose their jobs in the coming months. The federation emphasized that 66% of India’s exports to the U.S. are now directly impacted by the 50% tariff wall, with small and medium enterprises (SMEs) bearing the brunt.
A FIEO spokesperson stated: “The abrupt doubling of tariffs by the U.S. has created unprecedented disruption. Export units cannot absorb such high costs, and production shutdowns are now a harsh reality.”
Government’s Position
The Indian government has expressed concern and is reportedly in talks with both U.S. officials and domestic industry bodies. New Delhi is also considering relief measures such as export subsidies, alternative financing options, and market diversification support to mitigate the blow. However, officials acknowledge that the crisis may not ease until tariffs are rolled back or exemptions are negotiated.
Economic & Employment Fallout
The production halts are expected to ripple through India’s broader economy. Tirupur’s knitwear sector alone employs nearly 600,000 workers, many of whom are migrant laborers. A prolonged slowdown could lead to large-scale layoffs, disrupting livelihoods and weakening rural economies that depend on remittances.
In Surat, the diamond polishing industry employs over 800,000 workers, and even a short pause in exports can trigger significant financial strain across the value chain.
The Road Ahead
Industry experts believe that unless Washington and New Delhi find a diplomatic solution, India’s export competitiveness could be permanently dented. Competitor nations like Vietnam, Bangladesh, and China are already stepping in to capture lost U.S. orders, threatening India’s long-standing dominance in textiles and gems.
For now, India’s export hubs are bracing for tough months ahead. As FIEO warns, if relief measures are not rolled out soon, production halts could turn into long-term closures, deepening the crisis in one of India’s most critical industries.
Summary
Export hubs in Tirupur, Noida, and Surat have halted production after U.S. tariffs doubled to 50%. FIEO warns of massive job losses, order cancellations, and long-term damage to India’s export sector.