Keypoints
- Moves production to Kenya and Ethiopia to cut US tariff costs
- Plans to double EU and UK revenue share within two years
- Absorbs costs and offers discounts to keep US clients
INDIAN garment exporter Gokaldas Exports is shifting more production to Africa while stepping up sales to the European Union and United Kingdom to offset the impact of steep US tariffs, Managing Director Sivaramakrishnan Ganapathi told Reuters.
Tariffs squeeze margins
About 75 percent of Gokaldas’ standalone sales come from the United States, where recent tariff hikes have pushed up costs compared with rivals in Bangladesh and Vietnam.
The company reported a core profit margin of about 12 percent in the first quarter of fiscal 2026, but Ganapathi warned that a 50 percent reciprocal tariff, if maintained, could drag margins into single digits.
Gokaldas has been absorbing part of the extra cost and offering discounts to protect relationships with major US retailers.
African production push
To stay competitive, Gokaldas is expanding production in Kenya and Ethiopia, where apparel exports to the US attract a baseline tariff of roughly 10 percent.
Several clients have requested garments originating from Africa to take advantage of these lower duties.
The African facilities give Gokaldas a cost edge and a hedge against further US trade actions.
European and UK growth
The company is also targeting Europe and the UK to diversify revenue.
EU and UK sales currently account for about 10 percent of turnover, but Gokaldas aims to double that share within two years, helped by the UK–India free trade pact.
Gokaldas produces around 90 million garments annually, shipping to Canada, France, the UK and the US.
With African plants ramping up and European demand rising, Ganapathi said Gokaldas is better positioned to weather prolonged US tariffs while sustaining growth.
