Titan mulls shifting some production to Gulf to dodge US tariff hike

Last month, Titan also announced that its has signed an agreement to acquire a 67% stake in Damas LLC, the holding company for the Damas jewellery business in the GCC region

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Tata Group's Titan may shift some manufacturing to the Gulf region to maintain low-tariff access to US markets amid trade tensions between US and India, Managing Director CK Venkataraman said, according to Reuters.

 

This comes amid rising tensions between India and the US, with President Donald Trump threatening to “very substantially” raise tariffs on Indian imports over its continued purchases of Russian oil.

 

Last month, Titan also announced that its Dubai-based wholly owned subsidiary Titan Holdings International FZCO has signed an agreement to acquire a 67 per cent stake in Damas LLC, the holding company for the Damas jewellery business in the Gulf Cooperation Council (GCC) region.

 

Damas operates 146 stores across the six GCC countries — UAE, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain. 

 

The deal amounts to approximately $282 million. In view of the deal, Venkataraman told Reuters that the Gulf region is being considered "as a manufacturing base to export to the US".

 

Last week, the US announced a 25 per cent tariff on Indian imports along with additional penalties, while the United Arab Emirates — a GCC member — currently faces a lower 10 per cent duty, the report added.

 

Venkataraman stated that relocating some production to a GCC country could help offset potential cost increases from higher tariffs. “If the tariffs remain like what they are currently threatened to be, then any arbitrage on a tariff... any significant arbitrage would be meaningful for us to consider,” he said.

 

He also added that the US itself remains a less viable option due to high costs and a limited skilled workforce required for jewellery production.

  (With inputs from Reuters.)