Garment exporters in Tiruppur, India, are anticipating potential gains from U.S. tariffs imposed on competitors like Bangladesh and China, leading to increased interest from major retailers such as Walmart and Costco. However, a significant shortage of skilled labor remains a major obstacle for India's garment industry in 2025.
Limited economies of scale and elevated costs further impede India's capacity to fully leverage this opportunity. Despite receiving numerous inquiries from U.S. buyers seeking to circumvent higher tariffs on other Asian suppliers, many factories in Tiruppur face idle sewing lines due to insufficient labor. To mitigate labor shortages, some manufacturers have established training centers to skill and source migrant workers.
While U.S. companies have been diversifying supply chains beyond China, India's garment industry struggles with capacity constraints. Retaining workers remains a challenge, as many return to their hometowns after a few months. Despite increased interest from U.S. retailers, pricing negotiations remain contentious due to higher labor and operational expenses in India.