Indian textile manufacturer Gokaldas Exports is ramping up shipments to the European Union and the United Kingdom, while increasing production in Africa, as rising US tariffs threaten profitability.
Generating roughly 75 per cent of its standalone sales from the United States and supplier to major retailers including Walmart, Gap and JCPenney, Gokuldas Exports expects its quarterly core profit margin to fall to single digits, compared with around 12 per cent in Q1, FY26.
The company produces approximately 90 million garments annually, exporting primarily to the US, Canada, the UK and France. These markets accounted for the bulk of its Rs. 38.64 billion ($438.97 million) in operating revenue during fiscal 2025.
To maintain client relationships, Gokaldas has been offering discounts and absorbing part of the additional costs linked to the higher tariffs. However, the company cautions this practice could only be sustained for a short period.
India’s $38 billion textile export industry has been hit hard by steep US tariffs, which are significantly higher than those imposed on competing countries such as Bangladesh and Vietnam, both facing a reciprocal duty of 20 per cent.
In response, Gokaldas has begun shifting portions of its production to Kenya and Ethiopia, where tariffs remain lower at a baseline of 10 per cent, following requests from clients to source from Africa.
The company is also increasing exports to the UK and EU, targeting a doubling of their combined revenue share from 10 per cent within two years, aided by the rollout of the UK-India Free Trade Agreement.
