Amid delays in the US-India tariff agreement, India is adopting a China-style export diversification strategy. After finalizing a trade deal with Oman, India is now in the final stages of negotiations with the European Union, its second-largest apparel export market. Currently, Indian apparel exports face 8–12% import duties in the EU, unlike Bangladesh, Vietnam, and Turkey. Amidst the delay in US-India Tariff Agreement, India is now working on Export Diversification Strategy like China. After the Trade Agreement with Oman, negotiations with EU are now in the final stages. EU is India’s second largest Apparel Export Market, where currently 8–12% Import Duty is imposed on Indian Products. Countries like Bangladesh, Vietnam and Turkey do not have to pay this fee.

Cotton import duty: India has given exemption in import duty on cotton from 19 August to 30 September. This has brought relief to the country’s textile industry, which is already struggling with the rising prices of raw materials and challenges like American tariffs. People associated with this industry said that exemption will help in making this sector more competitive. In the order issued late on Monday night, a temporary exemption in customs duty was announced on cotton imports.

High tariff on shipment in America

America first imposed 25 percent tariff on India. After this, he also threatened to put an additional 25 percent tariff for the purchase of crude oil from Russia. At the same time, other Asian countries such as 20 percent on Bangladesh, 20 percent on Vietnam and 30 percent on China have been imposed on China, which is less than a huge tariff of 50 percent imposed on India.

This demand was placed in front of the government

Industries bodies like the Confederation of Indian Textile Industry (CITI) urged the government to withdraw the import duty on cotton. Before this exemption, there was 11 percent duty on the import of cotton. Now the officials associated with this industry are hopeful that the government will keep the import of cotton on duty free even after September.

Reuters had earlier reported in their report that some Indian expoters are looking for manufacturing options in other countries to avoid the impact of high tariffs. The country’s garment sector was already struggling with the reduction in labor and its limited production capacity. Now if the expoters start manufacturing in other countries, then it will be a challenge for the government’s ‘Make in India’ initiative.

This challenge came to India

India aims to increase textile exports to $ 100 billion by 2030. The problem of American tariff has come at a time when India is emerging as a strong option for clothing customers in America as Bangladesh is facing political uncertainty and companies are trying to diversify their supply chains beyond China.

Rose in shares

Here, after this news came, the shares of many companies like Arvind Limited and Page Industries saw a boom. Where Arvind Limited shares crossed 300 with a bounce of two and a half percent. At the same time, Page Industries shares reached 44965 with a gain of Rs 275.

Also read:

The purchase of crude oil will continue from Russia, Indian Oil decided amidst the threat of American tariff

Trump Tariff: US President Donald Trump has imposed 50 percent tariff on India. With this, India has now joined the list of countries including Brazil, on which the most American tariffs have been imposed. With the same decision of Trump, there is a cloud of uncertainty on textile exports of Rs 87,000 crore from India to the US to the US. Experies whose manufacturing base are abroad, now they are planning to shift their production outside India. This has been revealed in the Economic Times report.

Production can be shifted to these Asian countries

Pearl Global Industries says that we are thinking of shifting the production of clothes exported to America to more favorable centers. The company’s managing director Pallab Banerjee, while announcing the results of the company’s quarter, said, “We are getting positive response from American customers for its operations in Vietnam, Indonesia, Bangladesh and Guatemala.”

Preparations to shift production in Africa too

Talking to ET, the second top garment and textile expoters said that they are planning to shift their production to Africa for American audiences. He says that there is a plan to shift his production for American audience in his manufacturing facility in Africa. Pearl Global’s manufacturing occurs in India, Bangladesh, Vietnam, Indonesia and Guatemala. The company supplies global brands such as Chikos, Kohls, Old Navy, Poligono, Primary, PVH, Ralph Lauren, Stylem and Target.

Way of development for India

On the matter of imposing 50 percent tariffs on India, Pallab Banerjee said that the company is working again on its business strategy amid these changing circumstances. He informed that production for American markets will be shifted to more favorable centers. At the same time, India can continue its development by taking advantage of other partnerships like the free trade agreement with Britain and focusing on its other FTA markets like Japan and Australia until the issue of tariff is resolved.

Also read:

Trump’s 50% tariff hit ‘Make in India’ plan, warning of this big agency