Indian clothing exporters are facing a sharp drop in US festive-season orders, while improving demand from the UK and EU offers a cautious alternative despite freight and pricing pressures.
Indian ready-made garment exporters are heading into the crucial festive shipping period with demand from the United States weaker by 25% to 30%, even as business from Britain and Europe is picking up, according to industry sources and the Apparel Export Promotion Council. The shift has left manufacturers balancing a softening American market against a better, though still cautious, order book from Europe, where buyers are proving more willing to commit as trade talks with India advance.
The pressure from the US is showing up in the numbers. AEPC data show that apparel exports in September rose to $1.1 billion, up 13.7% from a year earlier, but shipments in the first half of the current fiscal year fell 6.2% to $7.2 billion. In rupee terms, however, export earnings tell a different story: September shipments climbed 22.9% year on year to ₹10,824.6 crore, while April-to-September exports increased 3.4% to ₹69,300 crore. The gap reflects the effect of a stronger rupee accounting base, even as dollar-denominated sales remain under strain.
Exporters in Tiruppur, one of India’s main knitwear hubs, say the US slowdown has been sharp. A large exporter in the town told businessline that orders for Christmas and New Year have fallen by 25% to 30%, with shipments being pushed out earlier than usual so goods can reach stores before November. Ramu Shanmugam, chief executive of Clothing Connections and chairman of the IT wing subcommittee of the Tiruppur Exporters’ Association, said September and October are normally key months for orders and dispatches linked to the Christmas, winter and early spring seasons. He said fresh US business has been delayed or renegotiated after last year’s tariff shock, leaving exporters to offer steep discounts in some cases to keep factories running.
There is, however, a counterweight in Europe. Rajkumar, vice-chairman and managing director of Best Corporation in Tiruppur, said demand from the UK and the EU is improving, helped by the UK free trade agreement and optimism around a possible EU pact. Shanmugam also said customers are more positive than they were a year ago, although they remain sensitive to price and reluctant to commit too early. AEPC chairman A. Sakthivel said exporters are being squeezed on two fronts: the US market is weakening, while Europe-bound shipments remain exposed to high freight costs and disruption around the Red Sea. Industry hopes that the gradual recovery in traffic through the Suez Canal will ease logistics pressures in the second half of the fiscal year.
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