Synopsis:
- Indian garment exporters are diversifying beyond the US following tariff disruptions.
- Orient Craft has reduced its US sales share from 84% to below 10%.
- Gokaldas Exports aims to increase Europe’s revenue contribution to 25–30%.
- Exporters are targeting the UK, EU and UAE while expanding domestic manufacturing.
India’s garment exporters are rethinking their dependence on the United States after tariff hikes disrupted orders, increased pricing pressure and squeezed manufacturers’ margins. Companies that once relied heavily on American buyers are now accelerating expansion into Europe, the United Kingdom, the United Arab Emirates and other international markets.
The shift follows US tariff increases of up to 50% in 2025, which affected Indian manufacturers supplying major American retailers. According to a Reuters report published on November 11, 2026, exporters are increasingly treating market diversification as a long-term business strategy rather than a temporary response to trade uncertainty.
Orient Craft Reduces US Market Exposure
Orient Craft, one of India’s garment manufacturers, has significantly reduced its dependence on American customers. Founder Sudhir Dhingra said the company has redirected sales towards Britain, Europe and, to a smaller extent, the Indian market.
Before the tariff disruption, the US accounted for approximately 84% of Orient Craft’s sales. That share has now fallen to less than 10%, with the company reporting annual exports of around ₹1.5 billion.
The tariff uncertainty also affected relationships with American buyers. According to Dhingra, some customers cancelled orders or demanded discounts after the tariff increases were announced in April 2025. Certain buyers reportedly asked manufacturers to absorb 25% of the duty, despite production margins being below 10%.
The experience has prompted the company to reconsider its dependence on the American market, even as the possibility of lower duties and a trade agreement remains.
Gokaldas Exports Targets European Growth
Gokaldas Exports, which employs more than 53,000 people, is also pursuing a broader export strategy.
The company plans to increase Europe’s contribution to revenue from approximately 15–16% to 25–30% over the next three to five years. At the same time, it aims to reduce the US share from 50–55% to 35–40%.
Managing Director Sivaramkrishnan Ganapathi described the change as a lasting strategic shift rather than a temporary adjustment.
Industry figures also indicate changing export patterns. Between April and August 2026, India’s textile, apparel and home-furnishing exports to the US declined 9.8% to $4 billion. Shipments to other markets increased 3.7% to $15.2 billion, according to the Global Trade Research Institute.
UK, EU and UAE Emerge as Alternative Markets
Exporters are increasingly exploring markets where trade conditions and demand offer greater predictability.
Indian clothing receives duty-free access to the UK under the India-UK trade agreement that came into effect in July 2026. A similar agreement with the European Union could potentially eliminate duties ranging from 12% to 17%.
Germany, France, Italy and the Netherlands are among the key European markets being targeted by Indian exporters. The UAE is also emerging as an attractive destination as manufacturers seek to broaden their international customer base.
Alongside market expansion, companies are exploring ways to reduce manufacturing costs and improve operational efficiency.
Domestic Demand and Manufacturing Expansion
Ranchi in Jharkhand is attracting garment manufacturers through subsidies, easier access to land and workforce availability. Gokaldas Exports already operates two factories in the region and plans to establish a third, potentially creating up to 4,600 additional jobs.
The company has also highlighted an estimated 10% efficiency advantage at its Ranchi operations compared with other locations.
India’s domestic apparel market provides another growth opportunity. Valued at approximately $150 billion and growing at 7–8% annually, the market offers manufacturers an alternative source of demand as international trade conditions remain uncertain.
The developments indicate a broader restructuring of India’s garment export industry. While manufacturers are not abandoning the US market, the focus is increasingly shifting towards a more balanced export portfolio, stronger domestic demand and cost-efficient production.
For India’s textile and apparel sector, the next phase will depend on how effectively exporters convert new market opportunities into sustained orders and long-term business relationships.
Disclaimer: This article is for information purposes only and is not investment advice.
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