Indian Garment Exporters Pivot to Europe After US Tariff Hikes

Indian garment exporters are aggressively diversifying their trade portfolios to mitigate the impact of US tariff hikes announced by Donald Trump in April 2025. With duties reaching as high as 50 percent, manufacturers faced cancelled orders and pressure from US buyers to absorb costs, leading to a 9.8 percent drop in textile and apparel exports to the US, falling to $4.0 billion between April and August.

Major firms are shifting focus toward the European Union, the United Kingdom, and the United Arab Emirates. Orient Craft reduced its US sales share from 84 percent to less than 10 percent, while Gokaldas Exports aims to grow its European revenue share to 30 percent within five years. This transition is supported by a July trade deal granting duty-free access to Britain. To further lower operational costs, some manufacturers are relocating facilities to cities like Ranchi, Jharkhand, to utilize local subsidies.

Industry leaders describe this shift as a structural strategy rather than a temporary reaction. While shipments to the US declined, exports to other global markets rose by 3.7 percent during the same period.