Following the recent 50 per cent tariffs imposed by the US on Indian goods, several Indian companies are strategically shifting their operations to Africa to maintain access to the American market. This move is a direct response to the punitive tariffs, which were a consequence of India's continued purchases of Russian oil.

Companies like apparel manufacturer Gokaldas Exports and premium garments maker Raymond Lifestyle are among those looking to expand production in African countries, where US tariffs can be as low as 10 per cent. The tariffs have hit labor-intensive sectors such as jewelry and apparel the hardest, with a recent Bloomberg Economics note suggesting that exports of some goods could drop by as much as 90 per cent.

The tariffs are expected to more than halve India's overall exports to its largest market, the US/ In 2023, India exported over $20 billion in textile products, jewelry, and diamonds to the U.S.

Sivaramakrishnan Ganapathi, Managing Director, Gokaldas Exports, confirms, his company plans to continue expanding its presence in Africa to offset the high tariffs. Gokaldas already operates four factories in Kenya and one in Ethiopia, both of which face a 10 per cent US tariff. Similarly, Amit Agarwal, CFO, Raymond Lifestyle, notes, the company is in talks with its American clients to increase shipments from its Ethiopian plant.

African nations have emerged as a viable alternative for Indian companies due to favorable business environments. Countries like Ethiopia, Nigeria, Botswana, and Morocco are offering various incentives, including tax holidays, customs duty exemptions, and value-added tax (VAT) exemptions, to attract foreign investment.