India garment exporters cut U.S. dependence after tariff shock

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India garment exporters cut US dependence

Highlights

Orient Craft reduces U.S. sales exposure to less than 10% from 84% after tariffs rose as high as 50%, now reallocating exports to Britain and Europe.
India's textile, apparel, and home-furnishings exports to the U.S. fell 9.8% to $4.0 billion in April-August, while exports to other markets rose 3.7% to $15.2 billion.
The Apparel Export Promotion Council intends to lift Europe's share of industry revenue to 25-30% and cut U.S. share to 35-40% within three to five years.

Export strategy shifts after tariff disruption

As reported by Reuters, companies such as Orient Craft are scaling back exposure to the U.S. after tariffs rose as high as 50% last year, prompting order cancellations and discount demands from American buyers. Founder Sudhir Dhingra says the company no longer wants to rely so heavily on a single market, even with duties now lower and the possibility of a trade pact.

At its Ranchi factory, Orient Craft now sends more output to Britain, Europe and, to a lesser extent, India. The U.S. accounts for less than 10% of sales, down from 84% before the tariffs, and the company records annual exports of about 1.5 billion rupees, or $15.82 million.

Dhingra says some U.S. buyers asked suppliers to absorb 25% of the duty after President Donald Trump first announced tariff hikes in April 2025, despite manufacturers operating on margins of less than 10%. He says the disruption leaves exporters unwilling to trust that any future arrangement will provide lasting certainty.

Europe gains share as industry recalibrates

Industry data suggests the shift extends beyond a single company. According to the Global Trade Research Institute, India's textile, apparel and home-furnishings exports to the U.S. fall 9.8% to $4.0 billion in April-August, while shipments to other markets rise 3.7% to $15.2 billion.

The U.S. share of Indian exports also falls to 25.4% at the end of August from 28.3% in 2022, as exporters diversify and look for lower-cost manufacturing bases. Ranchi, better known for coal and iron ore, is attracting garment factories with subsidies, easier land access and an educated workforce.

A. Sakthivel, chairman of the Apparel Export Promotion Council, says Germany, France, Italy and the Netherlands are key targets as the industry tries to raise Europe's revenue share to 25% to 30% over the next three to five years, from 15% to 16%. Over the same period, exporters aim to reduce the U.S. share to 35% to 40% from 50% to 55%, while still maintaining a presence in the American market.

As highlighted earlier, the WTO warned that geopolitical tensions could drive lasting global trade shifts through supply chain redesign.

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