Indian garment exporters face significant pressure because President Donald Trump implemented heavy new tariffs which led major U.S. buyers to require manufacturing relocation. The managing director of Pearl Global Pallab Banerjee reports that his company faces pressure from clients to move their orders from Indian factories to facilities located in Bangladesh, Vietnam and Guatemala.
India received a 50% tariff on apparel imports because of its Russian oil purchases which damaged trade relations leading to the imposition of 25% and additional 25% duties in late August. The 20% duty rates applied to Bangladesh and Vietnam create market advantages for these countries.
Many of Pearl’s customers request the supplier to pay part of the tariff expenses which according to Banerjee would be impossible to sustain. The major exporters RichaCo Exports and Titan consider establishing operations in Nepal or the Middle East to preserve their U.S. market access.
India was well-positioned to benefit from supply chain relocations from China while Bangladesh struggled with political instability. Exporters predict that manufacturing operations could permanently depart from India which would damage the “Make in India” initiative of Prime Minister Narendra Modi.
The apparel industry encountered existing problems because of workforce shortages and production capacity constraints. The current tariffs according to industry executives will probably speed up permanent decisions to move manufacturing away from Indian production facilities.
