By Ananta Agarwal (Reuters) -Indian textile manufacturer Gokaldas Exports plans to boost shipments to the European Union and the United Kingdom, and expand production in Africa, as punitive U.S.
Gokaldas Exports Targets EU and Africa Growth Amid U.S. Tariffs
Gokaldas Exports' Strategic Expansion
By Ananta Agarwal
Impact of U.S. Tariffs
(Reuters) -Indian textile manufacturer Gokaldas Exports plans to boost shipments to the European Union and the United Kingdom, and expand production in Africa, as punitive U.S. tariffs threaten to sap profits, the company's top executive said.
Shifting Production to Africa
Gokaldas, which makes about 75% 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% in the first quarter of fiscal 2026.
Future Prospects in the EU
The textile manufacturer produces about 90 million garments annually, with exports to the U.S., Canada, the UK and France accounting for the bulk of its 38.64 billion rupees ($438.97 million) in revenue from operations in fiscal 2025.
"If the reciprocal tariff of 50% 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 U.S. tariffs to maintain client relationships.
U.S. retailers are awaiting the outcome of U.S.-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 U.S. tariffs, which are significantly steeper than those on competing countries such as Bangladesh and Vietnam, both facing a 20% 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% 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% within two years, as the UK-India Free Trade Agreement takes effect.
($1 = 88.0250 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru; Editing by Dhanya Skariachan and Sherry Jacob-Phillips)
