Indian textile exporter Gokaldas anticipates margin improvement following the US trade deal, strengthening its global export outlook.
Gokaldas Exports, a leading Indian garment manufacturer and supplier to major global retailers, expects pressure on its core operating margins to ease in FY27, supported by lower U.S. import tariffs under India’s recent trade understanding with the United States, according to the company’s senior management.
The exporter, which derives nearly 75% of its standalone revenue from the U.S. market, supplies apparel to international brands including Walmart, Gap, and JCPenney. The company expects its quarterly core profit margins to improve to early double-digit levels, compared with 9.7% recorded in the third quarter of FY26. While management did not provide a specific timeline, it indicated that margin recovery is likely to begin sometime after the second quarter of FY27, as the benefits of reduced tariffs gradually flow through.
Gokaldas’ margins had come under pressure following the imposition of higher U.S. tariffs, as the company chose to absorb a portion of the additional costs and offer pricing support to retain long-standing customer relationships. India’s $38 billion textile export industry has faced challenges in recent years due to elevated U.S. tariffs that were significantly higher than those applied to competing manufacturing hubs such as Bangladesh and Vietnam. Under the recently concluded trade arrangement, India’s tariff rate has been reduced to 18% from an earlier 50%, providing meaningful relief to exporters.
However, the company flagged lingering uncertainty after the U.S. Supreme Court struck down key tariff measures introduced during the administration of Donald Trump. “It is positive that India reached an understanding with the U.S. before the court ruling came into effect,” management noted, while adding that exporters remain cautious amid evolving trade policy dynamics.
Gokaldas Exports produces approximately 90 million garments annually, with shipments to the U.S., Canada, the UK and France forming the bulk of its business. The company reported ₹38.64 billion in revenue from operations in FY25, reflecting its strong export-led growth profile.