India's garment industry is reeling after US President Donald Trump slapped steep tariffs on Indian apparel exports, prompting panic among US buyers and a scramble among manufacturers to shift production abroad.
Pearl Global, which supplies major US brands including Gap and Kohl's, said it has been flooded with urgent calls from clients asking it to either absorb the cost of new tariffs or move production to other countries.
"All the customers are already calling me. They want us to shift from India to the other countries," Managing Director Pallab Banerjee told Reuters news agency.
Pearl operates factories in Bangladesh, Indonesia, Vietnam and Guatemala.
India now faces a 50 percent US tariff on garment exports — 25 percent imposed last Thursday and another 25 percent set to take effect on August 28 — a move the Indian government has called "extremely unfortunate."
By contrast, competing garment hubs like Bangladesh and Vietnam face a 20 percent tariff, and China 30 percent.
The tariff escalation — which partly targets India for its continued purchase of Russian oil — marks a sharp reversal from earlier expectations that India would benefit from shifting US supply chains.
Now, some American clients are putting orders on hold, and others are demanding a move to countries with lower tariffs.
'The industry is in the doldrums'
RichaCo Exports has shipped $111 million of garments to the US this year, with clients such as J. Crew Group, customs data shows.
All were made in its more than two dozen factories across India.
Around 95 percent of its annual Indian revenues come from the United States, said general manager Dinesh Raheja.
"We're exploring setting up a manufacturing base in (Nepal's capital) Kathmandu," he said. "The industry is in the doldrums."
Earlier this week, India's biggest jeweller and watchmaker Titan told Reuters it was looking at shifting some manufacturing to the Middle East to maintain low-tariff access to US markets.
Amit Agarwal, finance chief of top Indian garment maker Raymond, said he was pinning hopes on the company's one factory in Ethiopia — which faces just a 10 percent US tariff and could possibly add more production lines within three months to cater to US clients.
The US is India's largest garment export market.
Many exporters worry the tariffs could derail the country's ambition to become a major global manufacturing hub under Prime Minister Narendra Modi's "Make in India" initiative.
Panic in Indian garment bastion
Indian garment hub Tiruppur in the south, considered the country's knitwear capital and which accounts for nearly one-third of apparel exports, was bullish about the future earlier this year when Reuters visited and talked to exporters.
Panic has now descended on the hub.
Some factories in Tiruppur have been asked by customers to hold orders, while some plan to ship as many goods as possible before the full 50 percent tariff kicks in, said Naveen Micheal John, executive director at Cotton Blossom India.
"An importer, which had placed orders for underwear, has come back saying that if you haven't purchased yarns ... keep it on hold for now," he said.
Some garments in Tiruppur cost U.S. clients as little as $1, while a women's or men's T-shirt can vary from about $3.5-$5, which could soon face 50 percent tariffs, said N. Thirukkumaran, general secretary of the Tiruppur Exporters Association.
