India: US buyers tell garment manufacturers to absorb reciprocal tariff costs or shift production abroad
"Trump tariffs hit India's garment makers as US buyers say move production", 7 August 2025
Ever since Donald Trump's tariff salvo on India this week, garment maker Pearl Global - whose U.S. client list includes Gap and Kohl's - has been receiving midnight panic calls with an ultimatum: share the tariff hit or move production out of India.
...Pearl Global has offered to shift production to its 17 factories in Bangladesh, Indonesia, Vietnam and Guatemala to bypass the steep U.S. levies on Indian imports...
Pearl gets roughly half of its business from the United States. Some clients offered to continue taking products from India if it could share the tariff burden, but that is not viable, Banerjee said, without naming the customers.
The 50% U.S. tariff - comprising 25% that kicked in on Thursday and another 25% due to come into force on August 28 as a penalty for buying Russian oil - has stunned U.S. garment buyers and their Indian suppliers, who say they are considering taking their manufacturing operations beyond Indian shores, even to less-established garment hubs like Ethiopia and Nepal.
Some exporters also say they have been asked by U.S. clients to put orders on hold...
While Pearl can use its foreign factories to meet U.S. orders, exporters that rely on domestic factories are set to be hit much harder.
RichaCo Exports has shipped $111 million of garments to the U.S. this year, with clients such as J. Crew Group... All were made in its more than two dozen factories across India. Around 95% 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...
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 U.S. markets...
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% 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...