Tariffs on Indian exports catatrophic: Siva Ganapthi, Managing Director, Gokaldas Exports

12 August 2025, Mumbai 

A prominent Indian garment manufacturer, Gokaldas Exports is facing a major crisis due to a steep 50 per cent tariff imposed by the United States on Indian goods. In an interview with the Economic Times, Siva Ganapathi, Managing Director, outlines the potential fallout and the company's plan to cope. With India’s garment exports to the US valued at around $5 billion, the entire sector is at risk.

Ganapathi calls the 50 per cent tariff ‘catastrophic,’ arguing. it's more of an embargo than a trade barrier. He explains, a 25 per cent tariff could be managed, but a 50 per cent increase would lead to substantial business losses. The industry is already feeling the pressure, with some brands resorting to ‘shrinkflation’-reducing a product's features to keep prices the same- which could change how consumers shop.

To deal with this crisis, Gokaldas Exports is considering a strategic pivot to European markets. This would require the company to reduce its production in India and look for new opportunities overseas to counter the competitive disadvantage. Ganapathi hopes, a resolution will be found soon, ideally lowering the tariff to a more manageable 20 per cent. If not, the Indian garment industry could face severe consequences.

Ganapathi urges the Indian government to fast-track free trade agreements with the European Union and the United Kingdom, and to negotiate a deal with the US. He suggests, temporary measures, like export incentives, could help ease the financial burden on the industry and protect workers' jobs. Ganapathi points out, countries like China have used similar strategies to protect their industries, highlighting the need for India to act proactively. The future of Indian garment exports now depends on these critical negotiations and policy decisions.

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