Impact of 26% reciprocal tariff: Price ain’t right! US garment companies bargain shopping in India
US garment retailers are urging Indian apparel manufacturers to absorb some price increases caused by President Trump's 26% tariff on Indian products, which is less than on Vietnam, Bangladesh, Cambodia, and Pakistan. Indian manufacturers may offe...
Kolkata: US garment retailers and brands have reached out to Indian apparel manufacturers, exhorting the latter to partly absorb a likely product price increase due to US President Donald Trump’s tariff policy. The US companies are striving to ensure that American consumers do not experience a steep price rise after Trump slapped India with a 26% reciprocal tariff. The tariff hit on India is however lower compared to Vietnam’s 46%, Bangladesh’s 37%, Cambodia’s 49% and Pakistan’s 30%—all major textile exporters to the US. “The US buyers have reached out to us to negotiate prices,” said KM Subramanian, president of the Tiruppur Exporters Association (TEA).
“They are telling us that since the rupee has weakened against the dollar, there is room to relook into the prices to bring down the impact of the 26% reciprocal tariff, which is going to pinch the pockets of American consumers,” he said. Tiruppur is considered as India’s knitwear hub with manufacturers there supplying basic apparels to many countries at $2 -$5 per piece.
"The US buyers have already knocked on the doors of Indian exporters with offices in the US. We can, at best, give a discount of 5% as our margins are slim. But they have to give us higher business compared to Bangladesh,” added Lalit Thukral, president of Noida Apparel Export Cluster. The Noida cluster comprises 4,000 units producing fashion embroidered garments at $5-$30 per piece.
Apparel exporters from Noida in Uttar Pradesh and Tamil Nadu’s Tiruppur are meanwhile set to seek capital subsidy from the government to expand capacity, modernise factories and set new plants. They will also seek interest rate subvention on exports so that they do not lose any business to Bangladesh.
“Wewill be reaching out to the commerce ministry next week when there will be more clarity. To leverage the lower tariff (compared to other exporting countries), we need to increase our production. For doing so, we need capital subsidy, where the government should give us support,” Subramanian said.
