Vardhman Textiles is hoping to see some pricing gains as US tariffs force textile orders to shift from China to other countries including Bangladesh. India exports 45 percent of its yarn production to Bangladesh which then uses the yarn to manufacture ready-made garments for export to the European Union and the US.
Supplying to global retailers like GAP, H&M, and Uniqlo, the firm sees the current tariff disruption as a long-term opportunity.
"If China is not competitive, that business will go to all other countries, including Japan, Bangladesh, Pakistan or India. Every country will have some advantage, including Bangladesh. And in any case, wherever we are exporting to these countries other than China, I think that advantage can be shared between the various suppliers because of the duty advantage," said Managing Director Neeraj Jain, in a posting earnings call with analysts earlier this month.
Vardhman Textiles is one of India's largest vertically integrated textile manufacturers, with a significant presence in the yarn and fabric segments.
Meanwhile, the company sees a long-term opportunity in the US once the tariff negotiations settle down. In April, US President Donald Trump imposed a 26 per cent tariff on Indian exports, mainly impacting the textile industry. However, as the imposition of tariffs is on hold for 90 days to ensure bilateral discussions, Vardhman Textiles is hopeful that the pause will lead to a more favourable outcome for Indian exporters.
The US is India’s largest export destination, comprising around 28 percent of its total textile exports for FY24. India, as the third largest textiles supplier to the US, accounted for contributed 9 percent of the US’s total textile imports for 2024, according data from India Ratings.
"Some of our US-based customers are referring to this situation as short-term pain for long-term-gain and we share the same optimism. So as a response, we are actively engaging with customers to understand what their evolving needs are and we are positioning ourselves as a strategic and reliable partner," said Executive Director of Vardhman Textiles, Sagrika Jain.
Currently textile exports bear a tariff of 10 per cent and the extra costs are mostly borne by the buyer brands, according to Vardhman. "They have now started requesting that a part of that (tariff cost) be borne by the fabric producers or the spinners, though we have not agreed on anything, " Jain added.
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