CHENNAI/NEW DELHI: Leather goods, non-leather footwear, apparel and textile makers expect revenues to grow in the US, following lower tariff rates than competing China, Vietnam and Bangladesh. However, labour-intensive carpet makers fear loss of business due to lesser duty on Turkey, Azerbaijan and Nepal.
Carpet exports from India to the US are pegged at around $1.2 billion (out of total $2 billion global shipments) and companies fear that the tariffs may make the hand-crafted products uncompetitive.
“These tariffs are dangerous. Turkey is a threat and so are some of other competing countries due to lower tariffs on them compared to 27% on India. Margins are not much to play around for us and if we lose business, there are chances that many units may shut down,” Rudra Chatterjee, chairman of carpet maker Obeetee told TOI.
Saying that it will take a long time to develop alternate markets across Europe, Chatterjee hoped that govt will negotiate lower tariffs for the sector during the bilateral trade agreement (BTA) talks with the US.
Regarding opportunities in leather goods, non-leather footwear and textile exports, Israr Ahmed, former VP of Federation of Indian Export Organisations (Fieo) and MD of Farida Group, said currently 80% of the global footwear are sourced from China, Vietnam, Bangladesh, Indonesia and Cambodia. “The lower tariffs on India will open the window for contract manufacturers of global brands to expand here. It will bring us business.”
Out of the country’s $4 billion leather and non-leather footwear exports in April-Feb of FY25, the US accounted for 22% or $870 million.
On the textiles front, the Apparel Exports Promotion Council (AEPC) said India stands to gain as rates are lower than China, Bangladesh, Vietnam, Cambodia, and Sri Lanka. “The current Trump tariff, however, offers edge to Brazil, Turkey and other apparel exporting EU countries like Italy, Germany and Spain. But given the intrinsic strength of Indian apparel sector and presence of the entire value chain, it may work out in India’s favour eventually,” Mithileshwar Thakur, secretary general, AEPC said.
India’s textile exports are estimated at $33.2 billion in the April-Feb ’24-25 period, of which 30% were to the US.