August 30, 2025

Big news from the world of Indian business! Indian companies are packing their bags and heading to Africa to keep their exports alive and kicking despite the huge US tariffs. President Donald Trump's government slapped one of the highest tax duties on Indian goods as punishment for India's Russian oil purchases. Some tariffs hit a massive 50%, causing pain especially for labor-heavy sectors like jewelry and garments. Companies like Gokaldas Exports Ltd., the famous GAP supplier, and Raymond Lifestyle Ltd., known for premium clothes, are shifting their production to African countries like Kenya and Ethiopia. These nations offer much lower US tariffs—only about 10%. This staggering difference is like a jackpot for exporters struggling under the US taxes. "We will continue to expand in Africa in case of 50% tariffs," said Sivaramakrishnan Ganapathi, Managing Director of Gokaldas Exports, adding he hopes things will calm down soon. Gokaldas already runs four factories in Kenya and one in Ethiopia. Raymond Lifestyle is also talking to American clients about sending more goods from its Ethiopian plant to fight the tariff hurdle. CFO Amit Agarwal said, "We can obviously shift some of the clients to the Ethiopian factory." Jewelry and diamond exporters are not sitting still either. Dharmanandan Diamonds, from Surat, is eyeing Botswana to ramp up production if high US tariffs keep hurting business, said Managing Director Hitesh Patel. Why Africa? The continent is turning into a hot spot for manufacturing thanks to sweet deals like tax holidays, customs and VAT exemptions, plus special economic zones in countries such as Ethiopia, Nigeria, Botswana, and Morocco. Soumya Bhowmick, fellow at Observer Research Foundation, called it a “unique arbitrage opportunity” thanks to African governments’ attractive offers like tax breaks and easy business rules. But it's not a quick fix. Moving production and changing supply chains will take time. Some US buyers worry about possible conflicts in Ethiopia disrupting deliveries, even though labor there costs only about one-third of India’s. Still, as high tariffs chip away India’s usual edge, more shifts to Africa seem inevitable. In 2023, India shipped over $20 billion worth of textiles, diamonds, and jewelry to the US. These shifts could keep that trade flowing strong, just from new hotspots in Africa. Indian firms are clearly cooking up clever ways to beat the tariff storm and stay in the game!

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Tags: Indian companies, Us tariffs, Africa manufacturing, Gokaldas exports, Raymond lifestyle, Diamond exporters,