As India's non-leather footwear industry in Tamil Nadu welcomes substantial investments from global brands like Nike, Puma, Crocs, and Adidas, a significant concern looms over the industry -- the potential implementation of a 50% tariff by the United States. This tariff is seen as a substantial threat to the competitiveness of Indian exports, already strained by a previous 25% tariff that has pushed many brands to reconsider their manufacturing locations, The Times of India reported on August 9.
According to sources cited in the story (by Asmita Dey), companies such as Crocs and Nike are contemplating a pause on new export orders to the US from India, pending further developments in trade discussions between the two nations.
The apprehension is palpable -- if the tariff increases to 50%, it could effectively halt business activities for many exporters. An industry insider told ToI that the shift of orders to countries like Vietnam is a very real possibility.
In the apparel sector, the situation appears similarly dire. US retailers are reportedly urging exporters to move their production to alternative locations, particularly Bangladesh and Vietnam.
Pallab Banerjee, managing director at Pearl Global, a cloth manufacturer supplying major US brands, noted that while existing orders are unaffected, the prospect of a 50% tariff would render US production unviable.
Currently, half of Pearl Global's production is destined for the US, and the looming tariff could push their operations to other countries.
Despite the uncertainty, there are indications that not all brands are reconsidering their long-term strategies in India. Many are adopting a wait-and-see approach, intending to make decisions based on the outcome of trade discussions later this month.
Sivaramakrishnan Ganapathi, managing director and vice chairman at Gokaldas Exports, told the newspaper that the company has begun diversifying the markets where it sells, adding that the FTA with UK will be a major help.
According to sources cited in the story (by Asmita Dey), companies such as Crocs and Nike are contemplating a pause on new export orders to the US from India, pending further developments in trade discussions between the two nations.
The apprehension is palpable -- if the tariff increases to 50%, it could effectively halt business activities for many exporters. An industry insider told ToI that the shift of orders to countries like Vietnam is a very real possibility.
In the apparel sector, the situation appears similarly dire. US retailers are reportedly urging exporters to move their production to alternative locations, particularly Bangladesh and Vietnam.
Pallab Banerjee, managing director at Pearl Global, a cloth manufacturer supplying major US brands, noted that while existing orders are unaffected, the prospect of a 50% tariff would render US production unviable.
Currently, half of Pearl Global's production is destined for the US, and the looming tariff could push their operations to other countries.
Despite the uncertainty, there are indications that not all brands are reconsidering their long-term strategies in India. Many are adopting a wait-and-see approach, intending to make decisions based on the outcome of trade discussions later this month.
Sivaramakrishnan Ganapathi, managing director and vice chairman at Gokaldas Exports, told the newspaper that the company has begun diversifying the markets where it sells, adding that the FTA with UK will be a major help.
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