India’s garment sector, centered in Tiruppur, is attracting major U.S. retailers like Walmart and Costco seeking to avoid higher tariffs imposed on Bangladesh and China. Despite this opportunity, Indian manufacturers face a severe shortage of skilled labor, with many workers leaving for smaller, unregulated factories offering longer hours and higher pay. This labor crunch, combined with limited economies of scale and higher costs, is hampering India’s ability to fully capitalize on its new tariff advantage.
Key Takeaways:
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India’s garment industry is seeing increased interest from U.S. buyers due to favorable tariffs, but labor shortages and high costs limit its competitiveness.
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Many skilled workers leave large factories for smaller units with better pay, making workforce retention a major challenge.
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Despite government training initiatives, the sector’s fragmented structure and lack of scale hinder its ability to rival Bangladesh and China.
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