Indian garment exporters are expanding into European and domestic markets to reduce their dependence on the United States. The move follows tariff increases that disrupted orders and squeezed manufacturers’ profit margins.
According to a Reuters report, US tariffs of up to 50% on Indian goods prompted American buyers to cancel orders or demand discounts. Although tariffs have since fallen, Indian exporters are seeking more stable international markets.
India exported approximately US$37 billion worth of textiles and apparel, including handicrafts, during the financial year ending March 2026. The US accounted for nearly 25% of these exports. However, shipments to the US declined almost 10% between April and August, while exports to other markets increased, according to the Global Trade Research Initiative.
Major Exporters Shift Their Focus
Orient Craft has significantly reduced its dependence on the US. The company’s US export share has fallen from 84% to less than 10%. It has expanded its business across Britain, Europe and India, supplying retailers such as Next and Marks & Spencer.
Similarly, Gokaldas Exports plans to increase its European sales and reduce its reliance on American buyers over the coming years.
Gokaldas Exports Managing Director Sivaramkrishnan Ganapathi told Reuters, “It is not a temporary shift.”
Trade Agreements Open New Opportunities
Recent trade agreements are supporting India’s export diversification strategy. Under the India-UK trade agreement, which took effect in July 2026, Indian garments gained duty-free access to the British market.
Meanwhile, a separate India-EU trade agreement, expected to be implemented in December, could eliminate clothing tariffs and create additional opportunities for Indian manufacturers.
However, competition in Europe is also increasing. Bangladesh’s garment exports to the EU grew between July and October, with Spain accounting for almost all the reported growth.
As a result, Indian garment exporters are strengthening their presence in Europe and other markets to reduce risks associated with dependence on a single export destination.
