India's Textile Exports Under Pressure As Firms Move Production To Vietnam, Indonesia, Africa
While uncertainty clouds India's Rs 87,000-crore annual textile exports to the US, some exporters with overseas manufacturing bases are planning to shift production for American buyers out of India, according to a report by The Economic Times.
Pearl Global Industries said it would reassign US-bound production to more favourable hubs. 'We are seeing positive momentum from US customers for our Vietnam, Indonesia, Bangladesh, and Guatemala operations," managing director Pallab Banerjee said during the company's quarterly earnings call.
Another top-10 garment and textile exporter told ET that it plans to move its US orders to Africa. 'We have a facility in Africa, where we will try to shift our US orders," he said.
Banerjee said the company was benefiting from an early resolution of tariff structures in several Asian markets. 'Now that the US has declared final reciprocal tariffs on all major garment manufacturing countries at 19-20%, we are seeing positive momentum from US customers for our Vietnam, Indonesia, Bangladesh, and Guatemala facilities," he said.
Pearl Global, which manufactures in India, Bangladesh, Vietnam, Indonesia, and Guatemala, supplies to global brands including Chicos, Kohl's, Old Navy, Poligono, Primark, PVH, Ralph Lauren, Stylem, and Target.
With a 50% tariff now imposed on India, Banerjee said the company is recalibrating its business strategy to adapt to changing trade dynamics. 'While production for the US market will be reassigned to more favourable hubs, India will continue to grow by tapping new and advantageous partnerships, such as the UK FTA, and focusing on other existing FTA markets like Japan and Australia until the US tariff issue is resolved," he said in a call.
US revenue from India operations accounts for 16-18% of Pearl Global's FY25 group revenue, while the US business contributes 4-5% to overall group profit. 'We believe such recalibrations should help retain customer wallet share and maintain profitability," Banerjee said, adding that the company will go ahead with its planned capex in Bangladesh.
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