Worry clouds India spring-summer exports

As Indian exporters prepare spring-summer shipments to the United States, anxiety is spreading across factory floors and boardrooms alike. Order books for the next season are being negotiated under a cloud of uncertainty, driven by steep US tariffs on Indian goods and the absence of clarity on a long-pending trade deal.For many exporters, the stakes are high. The US remains India’s most important market for leather goods, garments and footwear. In some cases, it accounts for a dominant share of revenues. To hold on to buyers, exporters are making painful concessions, The Times of India reported on January 6.One leading leather goods exporter, who is planning visits to Europe and America in the coming weeks to secure fresh orders, says survival has become the priority, according to the report (by Sidhartha). Indian suppliers are offering discounts of around 20%, while American buyers have cut their own margins by 7-8%. The aim is to ensure that made-in-India products are not pushed out by competitors from other countries.The challenge lies in tariffs. Rival sourcing destinations face duties in the range of 15–20% when exporting to the US. Indian products, by contrast, are hit with tariffs of about 50%. The arithmetic does not work for long.“The buyers know that we cannot sustain this as this is more than the profit that we make,” the exporter said. “These are tough times to keep the order book up.”He is not alone. Several Indian garment and footwear companies have chosen to absorb part of the additional cost burden. At the same time, they have persuaded American buyers to share some of the pain by lowering margins. The calculation is that this arrangement might be bearable for a few months, until the proposed trade deal with the US is finalised.That hope, however, is wearing thin.There is still no clarity on when, or even whether, the deal will be concluded. Meanwhile, US President Donald Trump has continued to raise the pitch on tariffs, adding to the unease. Exporters say this uncertainty is now directly affecting discussions for the next season.An industry executive said some American buyers are reassessing their sourcing strategies. India remains under evaluation, but so do other comparable markets. “If the deal is done then they will stick with the Indian seller,” the executive said. “Otherwise some of them may shift.”Such a shift would have serious consequences. Leather and textiles are among India’s most employment-intensive sectors, supporting millions of jobs across clusters large and small. An industry veteran warned that these segments would be the worst hit if orders begin to move away from India.For now, exporters are trying to balance immediate pressures with longer-term strategy. Europe is one option. Negotiations for a free trade agreement with the European Union are progressing, raising hopes of better market access in the future. Yet even here, expectations are measured.While the agreement is in sight, exporters know that it could take several months for the treaty to be ratified after both sides finalise it. Any benefits, therefore, are unlikely to be immediate.Despite this, the US continues to dominate exporters’ thinking. The scale and simplicity of American orders make the market hard to replace. One exporter explained the contrast. “You can expect to get an order for 500 pieces with 20 designs from one American buyer,” he said. “In Europe, you will need 10 buyers and many more designs to reach that number.”This difference matters. Fewer buyers, larger orders and simpler product requirements reduce costs and complexity. For manufacturers already under strain, that efficiency can be the difference between staying afloat and slipping into losses.The government, for its part, has offered little reassurance. Officials have indicated that representatives of the Trump administration have reviewed what they described as a “good offer” from India. Beyond that, there has been no further communication.That silence has left exporters grappling with yet another cycle of uncertainty, just as they gear up for the next season’s production.