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Indian garment manufacturers are reconsidering their heavy dependence on the United States market after American tariffs disrupted orders, squeezed margins and pushed some of the country's biggest exporters to shift sales to Britain and Europe. Reuters reported from Ranchi on Wednesday, November 11, 2026, that the shift is now a deliberate strategy rather than a temporary reaction, with manufacturers saying they no longer want the fate of their businesses and their workers' jobs to rest on a single market.
At Orient Craft's factory in Ranchi, in the eastern state of Jharkhand, hundreds of women stitch dresses, shirts and children's clothing for British retailers Next and Marks & Spencer. Not long ago, most of the company's output would have gone to the United States. But founder Sudhir Dhingra, 77, has cut shipments there since the United States hiked tariffs, which rose to as much as 50 percent last year, hitting orders from customers including American Eagle and Gap. The United States now accounts for less than 10 percent of Orient Craft's sales, down from 84 percent before the tariffs, with annual exports of about 1.5 billion rupees, or $15.82 million.
Dhingra said American buyers cancelled orders or sought discounts after President Donald Trump first announced the tariff hikes in April 2025, with some asking suppliers to absorb 25 percent of the duty, despite manufacturers' margins being less than 10 percent. Even with duties now lower and the possibility of a trade pact, he has decided the risk of depending so heavily on one market is too great. "Even if there is a deal, what is the guarantee that it will hold water?" he said. "I don't wish to see that sword on my head."
Gokaldas Exports, which employs more than 53,000 people and is one of India's biggest garment exporters, is turning to Europe. "It is not a temporary shift," said Managing Director Sivaramkrishnan Ganapathi. The company aims to raise Europe's share of its revenue to 25 percent to 30 percent over the next three to five years, from 15 percent to 16 percent, while reducing the United States share to 35 percent to 40 percent from 50 percent to 55 percent.
The figures behind the shift are stark. In April to August, India's textile, apparel and home-furnishings exports to the United States fell 9.8 percent to $4.0 billion, while shipments to other markets rose 3.7 percent to $15.2 billion, according to the Global Trade Research Institute. The United States share of Indian exports fell to 25.4 percent at the end of August, from 28.3 percent in 2022.
Exporters said American tariff uncertainty, higher shipping costs and discount demands from United States buyers have squeezed margins, making other markets, including the United Arab Emirates, the United Kingdom and the European Union, look more attractive. Indian clothing also gets duty-free access to Britain under the India-United Kingdom trade deal that came into effect in July, while a similar agreement with the European Union could eliminate duties of 12 percent to 17 percent. United States duties on Indian products are currently 10 percent under Section 301, a United States law allowing tariffs on imports, as well as base tariffs from 6 percent to 12 percent.
Ranchi, best known for coal and iron ore, is now luring garment factories with subsidies, easier land access and an educated and reliable workforce. Reuters visited three factories in and around Ranchi, together employing about 8,000 people. "We have at least a 10 percent efficiency advantage here over other locations," said Mrityunjay Singh, senior vice president of operations at Gokaldas, which has two factories in Ranchi and plans to open a third, creating up to 4,600 jobs. "We can't rely on a single market, product or buyer," said Birendra Rawat of Ranchi-based Auburn Design, which makes Jockey underwear and clothing for local licensee Page Industries and produces 5 million to 6 million garments a month to be sold in India and neighbouring countries.
India's own apparel market, valued at $150 billion and growing 7 percent to 8 percent annually, provides a buffer against export uncertainty through steadier cash flows and demand. "Diversification is becoming a structural strategy, especially for exporters heavily exposed to the US market," said Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry. Exporters said they would not abandon the United States completely, given the size of the market and longstanding relationships with buyers, but the upheaval of the tariff shock meant it was unlikely to regain its former dominance, even if duties eased.
The Trump administration views tariffs as a tool to protect American industries and secure better trade terms. Indian exporters argue the measures could make their products less competitive and disrupt a major trading relationship. "The US market remains important, but it can't decide the future of thousands of families who depend on us," Dhingra said.