Latest news with #TwentySecondMiles
The Star
a day ago
- Business
- The Star
Exporters weigh options to deal with new US levy
MUMBAI: Indian exporters who built their businesses on Americans' demand for affordable goods are redrawing their strategies and weighing alternatives to reduce the pain from US President Donald Trump's shock 50% levy on imports. Trump's decision to double tariffs in the space of a week will make India-made apparels to generic drugs prohibitively expensive and can heavily disrupt exports, if not bring them to a grinding halt for many smaller businesses. 'This is worse than Covid for us,' said Lalit Thukral, founder of apparel exporter Twenty Second Miles, who fears the industry will have to sell his goods at a loss and comparing the tariff-led disruption to the coronavirus pandemic. 'At least, there seemed to be an end to it. This tariff situation is just getting worse.' While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the United States. Gokaldas Exports Ltd, one of India's largest apparel exporters that earns about 70% of its revenue from the United States, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' managing director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product (GDP) by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' – remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. 'The additional 25% oil penalty tariff would take the hit to US-bound exports to 60%, dragging GDP by 0.9%. 'This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods – all labour-intensive industries,' said Chetna Kumar and Adam Farrar of Bloomberg Economics. The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd, which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the United States, Reuters reported last week. Kalyan Jewellers India Ltd may consider expanding its manufacturing operations in Dubai to navigate US tariffs, executive director Ramesh Kalyanaraman said in an interview with Bloomberg TV. While Indian drugmakers are awaiting clarity on sectoral tariffs imposed by the United States, many of them have already begun scenario planning given Trump's dire threats. 'We'll be putting a initially small tariff on pharmaceuticals, but in one year – one and a half years, maximum – it's going to go to 150% and then it's going to go to 250% because we want pharmaceuticals made in our country,' Trump had said in an interview on CNBC. Alembic Pharmaceuticals Ltd, which earns about 30% of its revenue from the United States, sees acquisitions there as a way of boosting manufacturing in the region, its joint managing director Pranav Amin told Bloomberg News. Aurobindo Pharma Ltd, which counts on the United States for nearly 50% of its sales, announced the acquisition of Indiana-based Lannett Co on July 30 in a deal that will help expand its US manufacturing footprint. About US$3bil worth of auto components exports will be affected, according to data from the Automotive Component Manufacturers Association. A 50% tariff also makes India the worse off among its peers such as Vietnam, Indonesia and China. Firms elsewhere are also actively trying to lure non-American customers to diversify their customer base and market presence. Welspun Living Ltd, which sells home fabrics in the United States, told analysts last week that it is looking at the United Kingdom, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the United States, but is now looking to double down on European nations, according to its founder V Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. — Bloomberg
Fashion Network
4 days ago
- Business
- Fashion Network
Indian exporters weigh options to deal with US levy that's ‘worse than Covid'
While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the US. Gokaldas Exports Ltd., one of India's largest apparel exporters that earns about 70% of its revenue from the US, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' Managing Director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' — remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. Analysts Chetna Kumar and Adam Farrar weighed in: 'The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods — all labour-intensive industries.' The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd., which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the US, Reuters reported Tuesday. Welspun Living Ltd., which sells home fabrics in the US, told analysts last week that it is looking at the UK, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the US but is now looking to double down on European nations, according to its founder V. Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. Indian trade bodies across affected industries, including apparel, gems and jewellery, and shrimps, are ramping up calls of support from the Modi government. The Confederation of Indian Textile Industry wants the government to 'fast track' measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs. The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
Fashion Network
4 days ago
- Business
- Fashion Network
Indian exporters weigh options to deal with US levy that's ‘worse than Covid'
While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the US. Gokaldas Exports Ltd., one of India's largest apparel exporters that earns about 70% of its revenue from the US, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' Managing Director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' — remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. Analysts Chetna Kumar and Adam Farrar weighed in: 'The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods — all labour-intensive industries.' The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd., which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the US, Reuters reported Tuesday. Welspun Living Ltd., which sells home fabrics in the US, told analysts last week that it is looking at the UK, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the US but is now looking to double down on European nations, according to its founder V. Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. Indian trade bodies across affected industries, including apparel, gems and jewellery, and shrimps, are ramping up calls of support from the Modi government. The Confederation of Indian Textile Industry wants the government to 'fast track' measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs. The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
Fashion Network
4 days ago
- Business
- Fashion Network
Indian exporters weigh options to deal with US levy that's ‘worse than Covid'
While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the US. Gokaldas Exports Ltd., one of India's largest apparel exporters that earns about 70% of its revenue from the US, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' Managing Director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' — remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. Analysts Chetna Kumar and Adam Farrar weighed in: 'The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods — all labour-intensive industries.' The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd., which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the US, Reuters reported Tuesday. Welspun Living Ltd., which sells home fabrics in the US, told analysts last week that it is looking at the UK, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the US but is now looking to double down on European nations, according to its founder V. Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. Indian trade bodies across affected industries, including apparel, gems and jewellery, and shrimps, are ramping up calls of support from the Modi government. The Confederation of Indian Textile Industry wants the government to 'fast track' measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs. The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
Time of India
4 days ago
- Business
- Time of India
‘Worse than Covid': Donald Trump's 50% tariffs on India leave exporters troubled; will US move impact China+1 strategy?
The 50% tariffs on Indian products exported to the US makes them steeply expensive in the US market. US President Donald Trump 's escalation of trade tussle with India - doubling tariff rate on India from 25% to 50% in just a week - has left Indian exporters hunting for alternatives to deal with the blow. Indian export businesses, which thrived on providing cost-effective products to American consumers, are now forced to revise their business approaches and seek alternative solutions. The 50% tariffs on Indian products exported to the US makes them steeply expensive in the US market. This could severely impact exports, particularly affecting smaller enterprises, according to a Bloomberg report. Trump's tariffs: 'Worse than Covid' "This is worse than Covid for us," Lalit Thukral, founder of apparel exporter Twenty Second Miles was quoted as saying in the report. "At least, there seemed to be an end to it. This tariff situation is just getting worse." Thukral expressed concerns about having to sell products at a loss due to these heightened tariffs. Also Read | Tariff pe tariff': Trump tantrums jolt US-India ties. Will Quad fall apart? As rising tariffs threaten the survival of smaller businesses such as Twenty Second Miles, major companies are exploring various strategies, including shifting manufacturing to nations with reduced tariff rates, seeking customers in different markets and looking at potential US-based acquisitions. Indian exports uncompetitive after 50% US tariff Gokaldas Exports Ltd., which generates approximately 70% of its earnings from the US market and ranks amongst India's biggest clothing exporters, intends to increase production at its facilities in Kenya and Ethiopia, where US duties are only 10%. "Africa is looking like a good source at the moment," Gokaldas' Managing Director Sivaramakrishnan Ganapathi told Bloomberg. "We are seeing a huge amount of inquiries for production from that region from American customers." How will Trump's tariffs hit India? As exporters look to manufacture in other markets, the report said that the move could severely impact PM Narendra Modi 's signature 'Make in India' programme and hit India's aspirations to emerge as a manufacturing alternative to China. Some economists suggest that the imposed Trump tariffs could reduce India's gross domestic product by up to 1%, the report said Trump's tariff offensive has been accompanied by critical comments, describing India's trade restrictions as "obnoxious" and its economy as "dead", prompting counters from RBI and commerce minister Piyush Goyal who has asserted that India is the fastest growing major economy in the world. Also Read | Explainer: Donald Trump's 50% tariffs - will India budge on Russia crude oil trade? The business community expects the government to come to their aid. Trade associations representing various sectors including apparel, gems and jewellery, and shrimp exports are increasingly seeking governmental assistance. The Confederation of Indian Textile Industry is urging for expedited governmental measures to assist local apparel exporters, whilst the shrimp export sector is requesting export incentive schemes. Chairman Kirit Bhansali of the Gems and Jewellery Export Promotion Council has issued a statement requesting duty drawbacks, pre-shipment loans and working capital interest deferrals. Highest rates for 'BICS' nations According to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub, the business sector had anticipated "there would be more predictability." The potential US tariffs pose an immediate challenge to India's strategy of positioning itself as an alternative manufacturing hub to China. The long-term implications could be more severe as policy frameworks evolve, according to Kumar's assessment of supply chain restructuring efforts. Also Read | India in crosshairs: Trump's Russia tariffs- How it could make China great again Bloomberg Economics analysis by Chetna Kumar and Adam Farrar says, "The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewelry, textiles, footwear, carpets and agricultural goods — all labor-intensive industries." The new 25% US tariffs, imposed as a response to India's Russian oil purchases, will become effective in 21 days, allowing for intensive diplomatic discussions between New Delhi and Washington DC. Dealing with US tariffs: What exporters are planning Businesses are actively developing contingency plans. According to a Reuters report, Titan Ltd, a Tata Group jewellery manufacturer, is exploring options to relocate some production facilities to the Middle East, where US import duties are more favourable. Indian pharmaceutical companies are developing contingency plans in response to potential US tariff implementations, despite awaiting formal clarity on the matter. "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150% and then it's going to go to 250% because we want pharmaceuticals made in our country," Trump had said Tuesday in an interview on CNBC. Major items US imports from India Alembic Pharmaceuticals Ltd., which generates approximately 30% of its revenue from US operations, is considering acquisitions in America to enhance its manufacturing presence, according to Joint Managing Director Pranav Amin's statement to Bloomberg News. Aurobindo Pharma Ltd., with nearly half its sales from the US market, has secured the purchase of Indiana-based Lannett Co. on July 30, strengthening its American manufacturing capabilities. The automotive sector faces significant impact, with $3 billion in component exports at risk, as reported by the Automotive Component Manufacturers Association. The proposed 50% tariff places India at a disadvantage compared to competitors like Vietnam, Indonesia and China. Also Read | Donald Trump's 25% additional tariff on India: What are 'secondary tariffs' and how do they differ from 'secondary sanctions'? Explained Companies are actively seeking to expand their non-American customer base to establish a more diverse market presence globally. Looking beyond US Welspun Living Ltd., a prominent home fabrics supplier to the US market, recently disclosed to analysts its strategy to expand into the UK, European Union, Middle East, Australia, New Zealand and Japan, aiming to decrease its US market dependency. SNQS International, operating from Tiruppur's textile centre in southern India, currently derives 20% of its revenue from US operations. Its founder V. Elangovan has outlined plans to enhance focus on European markets. According to Thukral of Twenty Second Miles, major textile producers are now accepting smaller, lower-value orders to maintain operational continuity, potentially affecting smaller enterprises' market share. Stay informed with the latest business news, updates on bank holidays and public holidays .
