Walmart, Amazon, Target and other U.S. chains have given the order: no more clothing or fabric orders from India. The reason? Washington has already put 25% tariffs on these products, and there are rumors they could soon rise to 50%. The result? Companies don’t want to take on that extra cost and Indian suppliers are left without work. Just like that, we lose our favorite bargain stores… Let’s learn more about what’s happening.

What exactly happened?

The country’s economic outlook has definitely been turbulent. It all started when the U.S. government decided to target imported textiles from India. Tariffs are already at 25% and could even double within days… Of course, this situation has made big brands cut ties with their suppliers. They won’t be shipping any more clothing or fabric… Not a single thread.

Many factories in India have had to suddenly stop production to avoid massive losses. A sudden stop no one saw coming. But why is this happening now?

Direct hit to the Indian economy

The textile industry coming to a stop isn’t something we should ignore. In India, this sector is a key part of the economic engine. To put it in numbers, the textile industry represents over 10% of all the country’s exports and gives work (often precarious…) to more than 45 million people. And the U.S. alone buys 30% of all their textile production meant for export.

So yes, Walmart pulling out is a huge blow. And in places like Tamil Nadu or Gujarat, where much of the industry is concentrated, there’s already fear of temporary closures, mass layoffs, and a major regional crisis.

Walmart is a giant.

A company like Walmart stopping purchases can paralyze entire regions. Its purchasing volume is so big that if it falls, it drags everyone else with it. In this case, the consequences are already visible: factories shutting down, production calendars ruined, canceled orders and mountains of stock that won’t be shipped…

The domino effect

And it doesn’t stop at the factories. When production drops, all the surrounding services also suffer: transport, logistics, packaging, ports…The whole chain takes a hit. If this drags on, experts estimate that the losses could reach hundreds of millions of dollars, and the country’s foreign currency income could drop sharply…

Other countries rubbing their hands

While India deals with the tariffs, its competitors are getting ready to pick up the leftovers. Bangladesh and Vietnam, for example, have lower labor costs and are not under U.S. scrutiny. The result: they become much more attractive to retail giants that only want low prices. In other words, they gain ground while India loses (and while the population of other countries is exploited, of course).

Behind the numbers, there are people

It’s easy to talk about tariffs and international trade as if they were just figures. But behind every factory there are workers, entire families who live off this. And now, many of those people are in limbo. In places like Tamil Nadu there are entire towns that depend on textiles. The news that companies like Walmart were canceling orders hit like a bucket of cold water.

A new trade fight

All of this also reignites tensions between the U.S. and India. Their trade relations are not new, but this tariff hike adds a new conflict point that could complicate any future negotiation. For now, the uncertainty is growing, and no one knows what will happen with the tariffs in the coming days. But it’s clear that, in the meantime, many are already paying the price. What do you think about what’s going on with this tariff issue?