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Indian textile manufacturer Gokaldas Exports plans to boost shipments to the European Union and the United Kingdom, and expand production in Africa, as punitive US tariffs threaten to sap profits, the company's top executive said.
Gokaldas, which makes about 75 per cent of its standalone sales in the United States and counts Walmart, Gap, and JCPenney among its clients, expects its quarterly core profit margin to shrink to single digits from around 12 per cent in the first quarter of fiscal 2026.
The textile manufacturer produces about 90 million garments annually, with exports to the US, Canada, the UK and France accounting for the bulk of its ₹3,864 crore ($438.97 million) in revenue from operations in fiscal 2025.
"If the reciprocal tariff of 50 per cent continues in the long term, it would be difficult to do business with the United States. The tariff would act as a serious barrier," Gokaldas' Managing Director Sivaramakrishnan Ganapathi told Reuters.
Gokaldas has been offering discounts and absorbing some of the costs tied to the higher US tariffs to maintain client relationships.
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US retailers are awaiting the outcome of US-India trade talks before making further changes to their supply chains.
But Ganapathi warned, "People will do that for one quarter or two ... not beyond."
India's $38 billion textile export sector has been struggling with higher US tariffs, which are significantly steeper than those on competing countries such as Bangladesh and Vietnam, both facing a 20 per cent reciprocal levy.
Gokaldas has been gradually shifting part of its production to Kenya and Ethiopia, where tariffs are lower, after some clients requested that products originate from Africa. Both the countries face a baseline 10 per cent tariff rate.
The company has been ramping up exports to the United Kingdom and the European Union, aiming to double their combined revenue share from 10 per cent within two years, as the UK-India Free Trade Agreement takes effect.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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