US Buyers Seek Significant Discounts Post-Tariff Hike

In the wake of recent tariff increases imposed by the Trump administration, US buyers are pressing Indian exporters for discounts ranging from 15% to 20% on orders placed before the policy shift. Large retailers with global operations are sticking to their sourcing plans, but many Indian exporters report orders being put on hold.

Industry Faces Uncertainty and Potential Demand Destruction

Rahul Mehta of the Clothing Manufacturers Association of India highlights the confusion among buyers and exporters. The textile and gems sectors, reliant on discretionary spending, are particularly vulnerable to demand destruction as American consumers may delay purchases.

Exporters are concerned about the liquidity pressures on US buyers, especially smaller ones, who must now pay higher customs duties unexpectedly. This situation may lead to a slowdown in new orders and affect the exporters' margins.

Global Brands and Indian Exporters Negotiate Solutions

Global fashion brands are reassessing their strategies, with some US buyers requesting price adjustments or discounts from Indian suppliers to mitigate the tariff impact. Kashika Malhotra of Brandman Retail notes that some deals have been struck to share the additional tariff burden between buyers and exporters.

A leading garment exporter mentioned ongoing negotiations, suggesting a possible three-way split of the tariff burden among sellers, buyers, and consumers. Despite these challenges, India remains a key sourcing destination for global retailers, who are working closely with Indian partners to navigate the current uncertainties.

Shiraz Askari of Apollo Fashion International points out that while India is impacted by the tariff hikes, it still holds a competitive edge over countries like Vietnam and Bangladesh, which face even steeper duties.