What's Happening?
In late August, the United States increased tariffs on Indian goods to 50 percent, a move described by President Trump as a response to India's continued purchases of Russian crude oil. This sudden policy
shift has led to immediate reactions from brands, which have postponed or canceled orders, leaving factories in Indian export hubs like Tiruppur and Bengaluru struggling. The increased tariffs have resulted in significant disruptions, with shifts cut and workers laid off, exposing the vulnerability of garment workers in India's export economy. Many of these workers are migrants who lack the power to collectively bargain, leaving them to bear the brunt of the economic shock through layoffs, furloughs, and lost income.
Why It's Important?
The tariff increase has significant implications for the global garment industry, particularly affecting Indian workers who are already in precarious positions. The move highlights the interconnectedness of international trade policies and their direct impact on vulnerable populations. While some large exporters are temporarily absorbing parts of the tariff to maintain relationships, this approach is unsustainable, leading to closures of smaller factories and further economic strain. The situation underscores the need for more robust labor protections and accountability in supply chains, as well as the potential for geopolitical tensions to disrupt global commerce.
What's Next?
As relief talks and trade diplomacy continue, the long-term effects of the tariffs remain uncertain. Western brands have largely remained silent, maintaining arm's-length accountability despite public rhetoric on labor rights. The complexity of supply chains and subcontracting practices further complicate efforts to address these issues. The ongoing situation may prompt calls for policy changes to better protect workers and ensure fair trade practices. Stakeholders, including governments and industry leaders, may need to reassess their strategies to mitigate the impact on affected workers and stabilize the industry.
Beyond the Headlines
The tariff increase not only affects economic conditions but also raises ethical questions about the responsibility of brands and governments in protecting vulnerable workers. The opacity of supply chains and commercial terms often push risks onto workers, highlighting the need for greater transparency and accountability. This development may lead to increased scrutiny of purchasing practices and contract structures within the industry, potentially driving long-term shifts towards more equitable labor conditions.
