Indian Apparel Exporters Stand Firm Against US Tariff Pressures
In a bold move reflecting resilience in the face of trade headwinds, Indian ethnic womenswear exporter Shishir Kapoor from Lucknow has declared that he is not offering any discounts to American buyers. His business, MLK Exports, which sends more than half of its products to the US, remains unaffected by the steep 50% tariffs imposed on Indian exports. Kapoor emphasized this stance while engaging with buyers at the India International Garment Fair, stating that his clientele in the upper and mid-tier segments can absorb the impact by reducing their margins instead.
Navigating Uncertainty in the US Market
Not all exporters share Kapoor's confidence, as many in the industry report losing orders due to the uncertainty sparked by the aggressive tariffs and the fluctuating policies under former US President Donald Trump. HKL Magu, Managing Director of Jyoti Apparels and an industry veteran, noted that while demand for plus-sized women's garments in the US remains strong, there is apprehension about potential disruptions starting in April. American buyers are pushing for discounts of 10-15%, but Magu is proactively shifting focus towards European and British retailers to mitigate risks.
Magu highlighted significant operational changes, explaining, "Earlier we would ship 18,000-20,000 pieces of 40 styles to the US. Now, we are doing 1,800 pieces of 400 styles," illustrating how businesses are adapting to the volatile trade environment. Similarly, Tirupur-based HW Apparels, specializing in menswear, has recalibrated its strategy by targeting large US stores while smaller buyers from New York, who previously ordered 10,000-15,000 T-shirts, have withdrawn. This shift has reduced their monthly shipments from four-five containers to two-three, each containing 55,000-60,000 garments priced at $3-4 each.
Emerging Opportunities in New Markets
Amid the challenges, Indian exporters are actively exploring alternative markets to reduce dependency on the US. Europe and the UK have become prime targets, leveraging trade agreements that promise tariff advantages. For instance, Kolkata-based Kariwala is expanding its capacity to produce sustainable bags made from cotton and jute, alongside garments, despite geopolitical hurdles. President Anand Sureka revealed that the company has secured new orders from a leading supermarket in France, aiming to diversify its client base.
Sureka expressed optimism about the European Union deal, stating, "The EU deal will make tariffs zero for us (from 10% on garments and 2.9% on bags) and we hope that some orders that go to Bangladesh will come to us." This sentiment is echoed by Vinod Rathore, head of exports at Lux Industries, a hosiery products company, who noted increased interest from markets like Russia and Australia, partly due to turbulence in Bangladesh's textile sector. Rathore emphasized, "In one year, the situation has changed a lot: Bangladesh is down, we are seeing interest from Russia. We will try to increase our focus on EU."
Adaptive Strategies and Industry Resilience
The apparel sector is not succumbing to gloom but is instead innovating to navigate the transformed landscape. Smaller exporters are adopting cautious measures, such as insisting on upfront payments from buyers to safeguard against uncertainties. Shivraj, sales and sourcing manager at HW Apparels, pointed out that only high-volume clients are now engaging in business, fostering a collaborative spirit among manufacturers, sellers, and buyers. He added, "You need to come up with options on how to deal with Trump," referencing the increased tariff on T-shirts from India, which has risen from 17% to 67%.
Despite the complexities of trading with the US amid tariff disputes, exporters remain hopeful for a resolution. The industry's adaptability, from diversifying into sustainable products to tapping into new geographic markets, underscores a proactive approach to sustaining growth. As businesses like Kariwala and Jyoti Apparels pivot towards Europe and other regions, they demonstrate that strategic flexibility can turn challenges into opportunities, keeping the Indian apparel export sector engaged and optimistic for the future.
