Indian Garment Suppliers Eye Africa to Bypass US Tariffs
Indian garment suppliers, such as Gokaldas Exports and Raymond Lifestyle, are exploring African countries with lower tariffs to continue serving US customers like GAP, as US-India trade tensions escalate. The shift comes after the US imposed a 50% tariff on Indian garments, which took effect on 27 August.
The US tariffs are expected to significantly impact the volume of trade between India and the US, with some sectors potentially seeing a 90% decrease. In response, Indian export companies are considering South Africa, Kenya, and Egypt as potential African production locations. These countries offer favorable trade conditions and regional advantages, with South Africa being particularly attractive due to its established manufacturing infrastructure and ongoing business reforms.
Gokaldas Exports, which already has factories in Kenya and Ethiopia, is planning to expand its African presence. Dharmanandan Diamonds is also weighing increased production in Botswana. Raymond Lifestyle is considering shifting some production to its Ethiopian plant. The shift to African manufacturing is contingent on the tariffs remaining high and is not an immediate solution, but access to the US market remains an important consideration for foreign investors.
Indian garment suppliers are adapting to US tariffs by exploring African production locations. The shift highlights the growing business opportunity for countries with lower tariffs and established manufacturing infrastructures. The long-term impact on US-India trade relations and global supply chains remains to be seen.