{"id":4181,"date":"2026-11-11T10:03:49","date_gmt":"2026-11-11T05:03:49","guid":{"rendered":"https:\/\/ipp-news.com\/?p=4181"},"modified":"2026-11-11T10:03:49","modified_gmt":"2026-11-11T05:03:49","slug":"india-garment-makers-rethink-reliance-on-us-after-tariff-shock","status":"publish","type":"post","link":"https:\/\/ipp-news.com\/?p=4181","title":{"rendered":"India garment makers rethink reliance on US after tariff shock"},"content":{"rendered":"
\n

At Orient Craft\u2019s factory in Ranchi, hundreds of women stitch dresses, shirts and children\u2019s clothing for British retailers \u200bNext and Marks & Spencer.<\/strong><\/p>\n

Not long ago, most of Orient Craft\u2019s output would have gone to the US. But founder Sudhir Dhingra, 77, has cut shipments there since \u200cthe US hiked tariffs, which rose to as much as 50% last year, hitting orders from customers including American Eagle and Gap.<\/p>\n

Even with duties now lower and the possibility of a trade pact<\/a>, Dhingra has decided it is too much of a risk to depend so heavily on one market.<\/p>\n

\u201cEven if there is a deal, what is the guarantee that it will hold water?\u201d he said. \u201cI don\u2019t wish to see that sword on my head.\u201d<\/p>\n

Orient \u200bCraft is one of many Indian companies reconfiguring their export destinations and their exposure to the US, in light of the tariff shock, in a move that is likely \u200bto strengthen New Delhi\u2019s hand in its trade negotiations with Washington<\/a>, and potentially reduce India\u2019s vulnerability to US pressure over time.<\/p>\n

Dhingra said US buyers \u2060cancelled orders or sought discounts after US President Donald Trump first announced the tariff hikes in April 2025, with some asking suppliers to absorb 25% of the duty, despite manufacturers\u2019 margins being \u200bless than 10%.<\/p>\n

Orient Craft has since moved sales to Britain, Europe and, to a lesser extent, India.<\/p>\n

The US now accounts for less than 10% of sales, down from 84% before the \u200btariffs, with annual exports of about 1.5 billion rupees ($15.82 million).<\/p>\n

US duties on Indian products are currently 10% under Section 301, a US law allowing tariffs on imports, as well as base tariffs from 6% to 12%.<\/p>\n

Gokaldas Exports, which employs more than 53,000 people and is one of India\u2019s biggest garment exporters, is turning to Europe.<\/p>\n

\u201cIt is not a temporary shift,\u201d said Managing Director Sivaramkrishnan Ganapathi.<\/p>\n

The company aims to raise Europe\u2019s revenue share to 25% \u200bto 30% over the next 3 to 5 years, he said, from 15% to 16%, reducing the US share to 35% to 40% from 50% to 55%.<\/p>\n

In April to August, \u200bIndia\u2019s textile, apparel and home-furnishings exports to the US fell 9.8% to $4.0 billion, while shipments to other markets rose 3.7% to $15.2 billion, according to the Global Trade Research Institute.<\/p>\n

The US share of Indian exports fell to \u200c25.4% at \u2060the end of August from 28.3% in 2022, according to industry estimates.<\/p>\n

<\/a>Building new markets, lowering costs<\/strong><\/h3>\n

Exporters said US tariff uncertainty, higher shipping costs and US buyers\u2019 discount demands have squeezed margins, making other markets, including the UAE, UK and EU, look more attractive.<\/p>\n

Indian clothing also gets duty-free access to Britain under the India-UK trade deal that came into effect in July, while a similar EU agreement could eliminate duties of 12% to 17%.<\/p>\n

\u201cGermany, France, Italy and the Netherlands are key targets,\u201d said A. Sakthivel, chairman of the Apparel Export Promotion Council, an industry group.<\/p>\n

Exporters are also looking to lower \u200bmanufacturing costs.<\/p>\n

Ranchi, in the eastern state of Jharkhand, \u200bis best known for coal and iron \u2060ore, but is now luring garment factories with subsidies, easier land access and its educated and reliable workforce.<\/p>\n

Reuters visited three factories in and around Ranchi, together employing about 8,000 people.<\/p>\n

\u201cWe have at least a 10% efficiency advantage here over other locations,\u201d said Mrityunjay Singh, senior vice president of \u200boperations at Gokaldas, which has two factories in Ranchi and plans to open a third, creating up to 4,600 jobs.<\/p>\n

\u201cWe can\u2019t rely \u200bon a single market, product \u2060or buyer,\u201d said Birendra Rawat of Ranchi-based Auburn Design, which makes Jockey underwear and clothing for local licensee Page Industries, and produces 5 million to 6 million garments a month to be sold in India and neighbouring countries.<\/p>\n

India\u2019s own apparel market, valued at $150 billion and growing 7% to 8% annually, provides a buffer against export uncertainty through steadier cash flows and demand.<\/p>\n

\u201cDiversification is becoming a structural strategy, especially \u2060for exporters heavily \u200bexposed to the US market,\u201d said Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry.<\/p>\n

Exporters said they \u200bwould not abandon the US completely given the size of the market and longstanding relationships with buyers.<\/p>\n

Still, the upheaval of the tariff shock meant it was unlikely to regain its former dominance, even if duties eased.<\/p>\n

\u201cThe US market \u200bremains important, but it can\u2019t decide the future of thousands of families who depend on us,\u201d Dhingra said.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

At Orient Craft\u2019s factory in Ranchi, hundreds of women stitch dresses, shirts and children\u2019s clothing for British retailers \u200bNext and Marks & Spencer. Not long ago, most of Orient Craft\u2019s output would have gone to the US. But founder Sudhir Dhingra, 77, has cut shipments there since \u200cthe US hiked tariffs, which rose to as much as 50% last year, hitting orders from customers including American Eagle and Gap. Even with duties now lower and the possibility of a trade pact, Dhingra has decided it is too much of a…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-4181","post","type-post","status-publish","format-standard","hentry","category-english"],"gutentor_comment":0,"_links":{"self":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/4181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4181"}],"version-history":[{"count":0,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/4181\/revisions"}],"wp:attachment":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}