India-US trade deal redraws the playbook for Indian exporters
A major apparel exporter said the announcement came late Monday, when he attended a private meeting and was quickly followed by calls to his U.S. customers as business dynamics changed overnight.
Until then, the exporter had been exploring shifting some of its operations to Sri Lanka, Kenya and Indonesia at the behest of buyers, but on Tuesday morning it asked its team to produce a list of shipments currently in transit to the United States.
While tariffs are expected to drop to 18%, the $1.50 per garment discount offered to buyers will no longer apply to shipments arriving at U.S. ports once the agreement goes into effect. “There will be either a revised bill or surcharge,” the exporter said, adding that the company has absorbed losses of around Rs 50 billion.
With next season’s orders now being finalised, exporters across sectors spent much of Tuesday renegotiating terms with buyers.
“The timing was very good,” said Sudhir Sekhri of women’s wear exporter Trendsetters. “Buyers are happy, discussions are progressing quickly, and the focus is now on scale-up, expansion and capability.”
However, leather goods exporters said the relief came too late for the upcoming season. “We missed this cycle and will have to wait,” said M Rafeeque Ahmed, chairman of Farida Group, noting that some orders have already been shifted to factories abroad. The gem and jewelery industry welcomed the move but said there was a need for clarity on the final terms. “Lower tariffs will reduce costs for US importers and increase the competitiveness of Indian diamond jewelery in our largest market,” GJEPC chairman Kirit Bhansali said, reiterating the demand for zero-duty access.
Jewelery exporters said business will pick up once details emerge. “Sentiment is positive and we will be back in business once buyers have reviewed the available stock,” said Colin Shah, managing director of Kama Jewelry.
Leather exporters warned that the window of opportunity could be short. “We have already waited for six months,” said Ramesh Kumar Juneja, who heads the Leather Export Council. “The effect may last another month or two at best.”
(With inputs from TOI)
