Daybreak - How Trump became Indian apparel makers’ unlikely saviour

Episode Date: November 17, 2025

Tiruppur, Tamil Nadu, India’s knitwear capital, has long depended on massive U.S. orders that shaped its factories, products, and growth. But when the Trump administration imposed a 50% tariff on Indian garment imports, the town’s export engine received a long-pending shock. Turns out, the crisis became a turning point. Manufacturers are now scrambling for discounts, shifting production to Sri Lanka and Kenya, reorienting toward Europe, and overhauling product lines from mass-market basics to intricate boutique styles. Amid layoffs, automation, and global diversification, Tiruppur’s exporters are discovering something surprising.This shock may be exactly the push the industry needed to evolve.Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Inside a factory in Tirupur, a textile town in southern India, known for producing nearly all of India's cotton knitwear exports, a digital display blinks. 64%. This is just the days line efficiency. But the number feels heavier now. Beneath it, a row of workers stitch plain white

t-shirts meant for H&M. And they've done this kind of work for decades. And for decades, much of what they made, t-shirts, underwear, joggers, babywear, moved along a single, reliable pot straight to the United States. And that relationship shaped everything. Tirupur's exporters built their factories, workflows and expectations around massive American orders, 15,000 pieces at minimum, and sometimes hundreds of thousands at a time. Entire product lines existed because US buyers wanted plain basics, fast and cheap. One local manufacturer relied on America for 99% of its business. Another spent 25 years supplying the same US client.

Across the town, more than a third of all exports were headed west. And then, on 27th of August this year, the US imposed 50% tariff on most Indian imports. For a cluster that ships to Walmart, Target, quarters, and every retailer in between, the shock was instant. Firms saw growth projections flip into revenue drops. Some scrambled for discounts in their local supply chain. others started shifting production to Sri Lanka, Kenya and even Bangladesh. So Tirupur did not just lose its biggest customer, it lost the familiar world that it had built its success on.

But here is the twist. Many exporters now think that this catastrophe might be exactly what they needed. Because once the panic faded, something unusual began to happen on the factory floors of Tirupur. And that is where our story really starts today. With an industry forced to change for the first time in decades and discovering that maybe it should have changed a long time ago. Welcome to Daybreak, a business podcast from The Ken. I'm your host, Nick Dha Sharma, and I don't chase the new cycle.

Instead, every day of the week, my colleague Rachel Vargis and I will come to you with one business story that is worth understanding and worth your time. Today is Tuesday, the 18th of November. You see, the machines in Therupur never really stopped. Needles still dart, cotton still moves and steady lines across tables. From the outside, it looks like business as usual. But inside the offices where orders are tracked and margins are calculated, the numbers tell a harder truth.

India's garment exports have been stagnant for years. Labor shortages, lower productivity and rising world. wages have made the country less competitive. Even before the tariff, major American buyers like Walmart and Target were shifting towards cheaper countries like Vietnam and Bangladesh, where government workers earn around 9,000 rupees a month, which is far below India's 16,500. So the tariff didn't really create the problem. It just ripped off the bandage. KPR, one of India's biggest knitwear suppliers used to send around 20% of its export to the U.S. Now, it expects that figure to drop into single digits, and the plan is to pivot

sharply towards Europe, and they are not alone. Across Tirupur, which is a town of nearly 900,000 people, manufacturers are doing the same. For companies whose entire identity revolved around the U.S. market, this is a dramatic shift. Saundara knitwares, which relied on America for 99% of its revenue, quickly negotiated. 5 to 10% discounts along its local supply chain, cheers to stay afloat. A leading babyware manufacturer, completely dependent on the US, decided to shift 30% of production to Sri Lanka as protection against future shocks. Another major exporter has begun stepping away from massive US clients like Walmart and

is in serious conversations with European retailers like Tesco and Next. Now, this re-evaluation is not just limited to 3,000. Tamil Nadu. Similar shifts are underway in Mumbai and in Kerala. Exporters now admit that for years they did not diversify because U.S. orders were simply too comfortable. A single American order could keep a factory busy for two months. European orders, in contrast, are smaller, usually 2,000 to 8,000 units and harder to navigate. And before the tariff, duty-free access made sticking with the U.S. even more appealing. And that comfort came with consequences. Sondara, for example, expected 20 to 25% growth this year. Instead, it faces a

25 to 30% revenue decline. The company now plans to shift 40 to 50% of its business away from the US within five years. Kitex garments in Kerala has already reduced its US exposure by 9% in one year. So, where is everybody going? Europe has emerged as a leading alternative. Australia, the Gulf and Russia are also gaining attention. The upcoming India-UK Free Trade Agreement expected to take effect by January could level the playing field with Bangladesh and Vietnam, which are countries that already enjoy duty-free access.

There is another key difference. Exporters say that European clients actually negotiate differently. They are more flexible, more open to discussions. One babyware exporter said that a boutique brand from Europe even granted extra lead time on an order, something which is unheard of with US buyers. Still, the pivot is not easy. Europe is fragmented and recession hit. Finding new clients takes one two years and because orders are smaller,

replacing one big US buyer requires multiple European ones. Yet, the optimism is creeping back. Tirupur's exporters association expects shipments to the UK to double next year. A second-generation exporter summed up the shift to my colleague Wally Vikram while pointing out at a framed ESG certificate on his factory wall. They said, for 25 years, my father shipped T-shirts to the same US bio. Now, I'm building my career by exploring Europe. It is harder, but it is safer.

So for a town facing its biggest crisis in years, this mindset marks a turning point. For more on this, stay tuned. The Ken reporter Wally Vikram walked through two different factories in Tirupur and the difference between the U.S. and European markets became obvious to her. In a unit producing for American buyers, workers churn out navy t-shirts and black joggers, plain, cotton, bulk basics. Printing and value edition often happens to. after the governments reached the US.

Whereas just across the town, a unit serving Europe moves at a slower pace. A worker might spend an hour sewing translucent pearls with the word love on a basal t-shirt. For example, a recent order required a lace hem, a yellow crochet flower, and a Chanel embroidery on women's t-shirts. Another used colour-change fabric

that shifts from maroon to orange with moisture. This is the transformation on. As exporters pivot to Europe, their product mix is evolving too. The US still has big buyers like Gap, but Europe has boutique labels, mid-sized clients that simply do not exist in the American market. Eastman exports, for example, supplies mass market gap in the US, but also boutique brands in Europe. Styles also differ sharply across regions. American brands prefer bright colors, reds and oranges and big boxes. old logos. European buyers, on the other hand, want subtle branding, muted tones, pastels,

and unique silhouettes. KPR's Italian clients prefer asymmetrical cuts in women's wear. There is also a growing demand for fabrics beyond cotton. Model, whiskers, seersuckle. For instance, purlay textiles, which supplies to European brands like mural and we, says that these buyers want premium stitching and new materials. Even sizes vary. For U.S. orders, Sondara, for example, produces nightwear up to 6xL or 7xL. European clients rarely exceed 2xL. But Europe's interest comes with resistance. New European buyers are demanding 12 to 15% lower prices, creating fierce competition. Exporters are cutting costs quickly. Some are moving products. Some are moving abroad. Best corporation, which, for example, depends on the U.S. for 70% of its revenue,

is shifting 30% of its production to Kenya to offset tariff damage. Another manufacturer has reversed its model. Bangladesh will now serve its U.S. clients, while India will handle Europe. Inside India, labor adjustments are unfolding too. Layoffs at larger factories have eased Tirupur's long-standing labor shortage. skilled workers have dispersed across the cluster. Of the 15 newly hired workers that Wally interviewed, 42 found new jobs within 2 to 3 months of being laid off. More than half are from the North India and they plan to stay.

Companies are also investing in more technology and automated cutting machines to improve fabric utilization and sewing efficiency. These upgrades are costly, but they chip away at India's long, outstanding productivity weaknesses. Taken together, these changes signal a deeper shift. The tariff, as painful as it is, may do what decades of comfort never achieved, which is push India's knitwear industry to reinvent itself. As one executive put it, the tariff might hurt us now, but it is the first real reason

we've had to change in a decade. Back at KPR Mills Unit 2, the red screen still blinks 60%. The worker in a pink salvar still feeds white cotton under the needle. But the destination tag for those t-shirts is different now. And so is the future that she is stitching towards. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings

and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague Snitha Sharma and edited by Rajiv CN.