Auto, electronics, apparel, jewellery cos work around reciprocal US tariffs

Kolkata | New Delhi: Indian companies in sectors like consumer electronics, jewellery and apparel are rushing to their anchor customers who export to the US for them, to ensure business continuity and plan alternative strategies amid the US threat to impose reciprocal tariffs.

President Donald Trump on Wednesday announced that he would impose reciprocal tariffs on India from April 2. By reciprocal tariff, the US plans to match India's import duties product wise. Current US tariffs on imports from India are zero or lower than what India levies for most products.

Homegrown electronic contract manufacturer Dixon Technologies has spoken to its clients - Indian and overseas companies - who were exporting to the US. One of Dixon's anchor customers, who exports to the US, has shared plans to export almost $1 billion worth of goods this year. "The interest is intense for US electronic exports from India," said managing director Atul Lall.

The Gem & Jewellery Export Promotion Council (GJEPC) is sending a team to the US on March 15 for confidence building and to work out future plans with major clients. The team will meet senior executives of the De Beers Group, Tiffany & Company as well as the chiefs of American industry bodies such as the International Diamond Manufacturers Association, Natural Diamond Council and Diamond Manufacturers & Importers Association of America.

"The focus of the meeting will be to ensure exports from India to the US are not impacted and the US exporters find ways to deal smoothly with Indian buyers," said GJEPC executive director Sabyasachi Ray.

India not only cuts and polishes diamonds for the US, but also supplies jewellery made of gold and other materials to the American market. In 2024, India accounted for 12.99% ($11.58 billion) of US' gem and jewellery imports of $89.12 billion, as per US International Trade Commission data.

Apparel manufacturers are also in touch with their US clients to ensure business continuity.

Lalit Thukral, president of the Noida Apparel Export Cluster, said the local manufacturers had a meeting with US buyers on Wednesday night. "Many leading global brands were there at the meeting," he said, but refused to disclose the brand names.

The Noida cluster, comprising 4,000 exporters, sells mainly fashion and hand-embroidered garments which commands a minimum production price of $5 apiece.

One of the largest apparel exporters, Gokaldas Exports, wants to rely on its plants in Kenya for the exports to the US. Kenya enjoys duty-free access to the US under the African Growth and Opportunities Act.

Import duties on Indian apparel is already between 11% and 28%.

The company's chairman S. Ganapathi recently told analysts that even in case of high tariffs from India, Africa may be spared. "There is no competitive situation between the US and African countries, nor do they enjoy trade surplus. So, we don't believe that (zero duty from Africa) will change. And if there is a tariff increase from the regular exporting nation, then the tariff delta will widen, which will only make Africa more attractive," Ganapathi said.