Textile exports worth as much as $11 billion to the US are facing a near embargo under President Donald Trump’s punitive duties.
A section of textile exporters is exploring ways to reach the American markets by reducing the Make-in-India component in their products and shifting production to neighbouring countries that have been levied significantly lower tariffs, such as Sri Lanka and Bangladesh.
“By reorienting production strategies, some exporters are looking at Bangladesh and Sri Lanka to tackle Trump’s tariffs. This means redirecting US-bound exports via these countries, as they benefit from lower tariffs and therefore can be used as a base for exports to America,” one member of a textile association said on condition of anonymity.
While the United States has imposed a 50 percent tariff on most Indian goods, doubling the levy from August 27, Sri Lanka and Bangladesh face lower duties at 20 percent. “This will mean shipping mostly raw materials to India’s neighbours in a bid to ensure the flow of textile exports to the US,” the person cited above said.
News Courtesy : Money Control.