Indian Exporters Turn to Africa Amid US Tariffs
Indian textile and diamond exporters, including Gokaldas Exports and Raymond Lifestyle, are exploring expansion in African countries like Ethiopia, Kenya, Tanzania, and Egypt. This move comes in response to the 50% US tariffs on Indian exports that took effect on August 27. The shift is contingent on the tariffs remaining high.
The US tariffs, imposed due to trade disputes, have significantly impacted Indian exports. In 2023, India exported over $20bn (Rs1.76trn) of textiles, jewellery, and diamonds to the US. Gokaldas Exports and Raymond Lifestyle, major players in the Indian garment industry, are now looking to Africa to circumvent these high tariffs. Gokaldas already has a presence in Kenya and Ethiopia, while Raymond Lifestyle has a plant in Ethiopia.
The situation presents an opportunity for African countries with established manufacturing infrastructures and lower tariffs. Dharmanandan Diamonds, a Mumbai-based manufacturer, is also considering increasing production in Botswana. The volume of trade between India and the US is expected to drop dramatically due to these tariffs, with some cases seeing up to 90% reduction.
The 50% US tariffs on Indian exports have led Indian companies to explore production expansion in Africa. This shift could boost African economies and reduce the impact of tariffs on Indian exporters, contingent on the tariffs remaining high. The situation highlights the significant influence of US trade policies on global manufacturing.
