India's garment exports have taken a major hit after the US imposed tariffs of up to 50 percent. In order to survive in the US market, exporters are offering discounts to existing buyers and are also trying to increase exports to new buyers in the European Union (EU). News: Reuters

Last August, US President Donald Trump doubled tariffs on Indian imports. As a result, taxes on various products from garments and jewelry to shrimp have increased, which has become one of the biggest trade barriers for India.

A Mumbai-based garment exporter said that they are now trying to increase exports to the European Union to reduce their dependence on the US market. "A quick free trade agreement (FTA) with the EU will give a big boost to Indian exports," he said.

The European Union is currently India's largest trading partner. In the fiscal year ending March 2024, merchandise trade between the two regions stood at $137.5 billion, a nearly 90 percent increase over the past decade.

Indian garment factories are modernizing to meet the EU’s stricter chemical use, product labeling and ethical sourcing standards, said Rahul Mehta, chief consultant at the Clothing Manufacturers Association of India. “Exporters are now keen to reduce their dependence on the US,” he said.

The US remains India’s largest market for ready-made garments and textiles, accounting for about 29 percent of India’s $38 billion exports in the fiscal year ending March 2025.

Vijay Kumar Agarwal, chairman of Mumbai-based Creative Group, said 89 percent of its total exports go to the US. They are now offering discounts to US buyers due to the increased tariffs.

"If these high tariffs continue, we may have to lay off 6,000 to 7,000 of our 15,000 employees. If the situation does not change after six months, we will consider shifting production to Oman or neighboring Bangladesh," he warned.