Indian exporters who built their businesses on Americans’ demand for affordable goods are redrawing their strategies and weighing alternatives to reduce the pain from US President Donald Trump’s shock 50% levy on imports.
Fine jewellery by Titan Company brand Tanishq – Tanishq- Facebook
Trump’s decision to double tariffs in the space of a week will make India-made apparels to generic drugs prohibitively expensive and can heavily disrupt exports, if not bring them to a grinding halt for many smaller businesses.
“This is worse than Covid for us,” said Lalit Thukral, founder of apparel exporter Twenty Second Miles, who fears the industry will have to sell his goods at a loss and comparing the tariff-led disruption to the coronavirus pandemic. “At least, there seemed to be an end to it. This tariff situation is just getting worse.”
While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the US.
Gokaldas Exports Ltd., one of India’s largest apparel exporters that earns about 70% of its revenue from the US, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy.
“Africa is looking like a good source at the moment,” Gokaldas’ Managing Director Sivaramakrishnan Ganapathi said in an interview. “We are seeing a huge amount of inquiries for production from that region from American customers.”
The mitigating strategies will be a gut punch for Prime Minister Narendra Modi’s flagship ‘Make in India’ initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India’s gross domestic product by as much as 1%.
Trump has peppered his tariff onslaught with jibes about how the South Asian nation’s trade barriers were “obnoxious” and its economy “dead” — remarks that have drawn counter from India’s central bank. But businesses are hoping for more than just retorts.
Businesses thought “there would be more predictability,” according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub.
“In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,” Kumar said, referring to companies trying to recast supply chains.
Analysts Chetna Kumar and Adam Farrar weighed in: “The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods — all labour-intensive industries.”
The revised US levy announced as a penalty for India’s purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC.
In the meantime, companies are working on hedging strategies. Tata Group’s Titan Ltd., which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the US, Reuters reported Tuesday.
Welspun Living Ltd., which sells home fabrics in the US, told analysts last week that it is looking at the UK, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market.
SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the US but is now looking to double down on European nations, according to its founder V. Elangovan.
Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms.
Indian trade bodies across affected industries, including apparel, gems and jewellery, and shrimps, are ramping up calls of support from the Modi government.
The Confederation of Indian Textile Industry wants the government to “fast track” measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs.
The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
River Island has had a newsworthy year with the company having reportedly been on the brink of collapse if its restructuring plan hadn’t been approved. And having just filed its accounts for 2024, we can see what was going on in the period that led up to the need for the comprehensive restructuring, including store closures.
River Island
The company — River Island Holdings Limited — made a loss before tax of £124.3 million, much wider than the £32.2 million loss of the year before. That came as turnover fell to £690.1 million from £701.5 million and gross profit dropped to £37 million from £46.7 million. The operating loss also widened dramatically to £125.7 million from £34.1 million. And the net loss for the financial year was £138.4 million after a loss of £24.4 million in the previous year.
Recent years have been particularly tough for the business with it having swung to that £32.2 million pre-tax loss in 2023 after having made a profit of £7.5 million for 2022. Turnover during 2023 had fallen 15.1% although the previous year had been flattered by being a 53-week period rather than 52 weeks.
But at the time of releasing its 2023 figures in October 2024 it had said that 2023 was a year of “reset for the business” with product ranges refocused and a new leadership structure put in place, plus other key moves.
It had also said it was starting to see the benefits from its investment with customers “reacting positively” and “improved business performance”.
The lower sales and wider losses it has just released for 2024, followed by the 2025 restructuring, would suggest that the improved trading either ended or simply wasn’t enough to turn around the company’s performance. Yet there were undeniable signs of the company starting to get back on track even last year.
In 2024, the turnover drop was only 1.6% and like-for-like turnover that excluded closed stores was down only 0.3%.
Higher costs
So what caused the very much wider pre-tax loss? The firm was hit by a non-cash provision of £80.4 million on an inter-company loan balance, as well as an £11.2 million increase in its trading loss. And it was impacted by a significant inflationary increase in the cost of good sold, which contributed to a lower gross margin on a percentage basis. That caused a 20.8% fall in gross profit.
It also saw significant inflationary pressures in its operating costs with staff costs increasing by 7.6%. And while cost savings in multiple areas did help, it’s overall distribution and admin costs increased.
As we know, the company has put a major restructuring plan in place which was approved in August by the High Court. This enabled a step change in the size and profitability of the retail estate and secured long-term funding. It now has a new and secure financing facility until 2028 and has been putting its restructuring plan into action that it said should allow it to return to profitability.
Part of that plan is Ben Lewis having returned as group CEO, having managed the business for nearly a decade before he stepped down in 2019. The company also appointed a new CFO in late 2024.
Its transformation plan sees it now working on right-sizing its store estate, growing like-for-like sales at improved margins and investing in growth and productivity.
It said it’s already seeing significant returns on its strategy with the gross margin percentage greatly improved, costs significantly reduced and underlying sales in its retail estate returning to growth. It’s expecting “a significant improvement in profitability” for the current year, although we probably won’t find out the details of this for some time, unless the company chooses to share the good news in advance of its next Companies House filing.
French cosmetics group L’Oreal is to increase its stake in Swiss dermatology firm Galderma to 20% from about 10%, the Swiss firm said in a statement on Monday.
Galderma is a dermatology specialist – Reuters
L’Oreal is buying the stake for an undisclosed sum from a consortium led by Swedish private equity firm EQT, which includes Abu Dhabi Investment Authority and Auba Investment Pte. Ltd. The deal is due to close in the first quarter of 2026. As a result, Galderma is looking into replacing board members representing the consortium by two non-independent board candidates from L’Oreal at the company’s next annual general meeting in 2026, it said.
“Galderma continues to deliver impressive growth, strong innovation, and category leadership across its broad, science-based dermatology portfolio,” said Galderma’s CEO Flemming Ørnskov in a press release. “With strengthened commercial execution, continued platform and portfolio expansion, and an increasingly consumer-focused approach to innovation, we are rapidly scaling into a dermatology powerhouse. We are pleased with L’Oréal’s increased investment, which affirms our direction and the meaningful value creation we expect in the years ahead. As we move into 2026, we remain fully focused on our Integrated Dermatology Strategy and on serving our customers, consumers, and patients.”
The businesses also plan to explore additional scientific research projects of mutual interest with a shared focus on skincare and skin health, innovation, and long-term growth. Galderma, originally set up as a joint venture between Nestle and L’Oreal before the latter sold its 50% stake in 2014, listed an initial tranche of its stock in March 2024.
Under fire since his alliance with Shein, Frédéric Merlin, the young head of BHV whose rise has been meteoric, admits he “underestimated” the challenge posed by the Paris department store, but stands by his strategy, intended to “keep retail alive.”
Frédéric Merlin, president of Société des Grands Magasins (SGM) and owner of BHV, during a photo shoot in Paris, 22 October 2025. – (AFP – Thibaud MORITZ)
“I always try to be humble, because at 34, you don’t know everything,” the executive recently told AFP during an interview on the sixth floor of the Bazar de l’Hôtel de Ville.
It is here that Shein, the Asian e-commerce giant accused of unfair competition and environmental pollution, is due to open its first permanent shop on Wednesday, under an agreement with Société des Grands Magasins (SGM), the commercial property company founded in 2021 by Frédéric Merlin and his sister, Maryline.
Originally from the Lyon region and raised by a father who ran a small industrial piping business and a stay-at-home mother, the siblings’ fortune is estimated at €600 million, ranking them 233rd in France, according to Challenges.
A “friend” of former president Nicolas Sarkozy, Merlin benefited from the financial backing of businessman Jean-Paul Dufour, a shareholder alongside SGM with “a 42.5% stake in the majority of the group’s subsidiaries,” according to its latest social report published in August 2024, as noted by L’Express.
“Ocean liner”
The owner of the BHV business since 2023, SGM also operates a dozen shopping centres, as well as seven Galeries Lafayette stores in the provinces, five of which are set to host Shein.
In protest, several brands have announced they are leaving the Paris department store, already shunned by suppliers unhappy about a build-up of unpaid invoices, which Merlin says are linked to “tools” issues that are being resolved, and not to cash-flow problems.
Dropped by Banque des Territoires (an entity of Caisse des Dépôts et Consignations) for the acquisition of the BHV building, SGM has also been excluded from the Union du grand commerce de centre-ville (UCV), while the Galeries Lafayette group refuses to allow Shein to set up in stores bearing its name.
“Who would want to work with a pathological liar?” said Yann Rivoallan, president of the Fédération Française du Prêt-à-Porter Féminin, on RMC.
Merlin “is not collaborative”, Nicolas Bonnet-Oulaldj, the deputy mayor of Paris in charge of commerce, told AFP.
“He told everyone that he had the support of Anne Hidalgo regarding Shein, which is totally false.” More generally, Merlin didn’t realise he was taking on “an ocean liner”, according to the department store’s inter-union body.
“What I underestimated was all the political and media attention that comes with taking on this Paris monument right opposite City Hall,” admits Merlin, denouncing the “surrounding hypocrisy” in the face of Shein and its many consumers.
“Head of the family”
“We could have done better,” admits the man who says he has made BHV “profitable” and works “14 hours a day.”
Born in the Lyon suburb of Vénissieux, Merlin grew up in a family that gave him “self-confidence” and “entrepreneurial drive.” After a spell at law school, the young man obtained a BTS in property, having been drawn to the profession during a placement.
Armed with a “€15,000 student loan,” he and his sister founded, at the age of 20, a commercial property consultancy (IMEA) before launching another (ADI) in 2014, specialising in the redevelopment of commercial buildings.
The Merlins hired their father, who brought his “industrial rigour,” until his death in 2018, the year SGM was launched, turning around shopping centres that nobody wanted any more in towns such as Roubaix or Mulhouse.
“You had to have a lot of nerve,” recalls Fabrice Fubert, co-director of a commercial property consultancy, who notably suggested in 2021 that Merlin acquire seven Galeries Lafayette stores.
Not “from the establishment,” Merlin is “an audacious man who takes risks and shakes things up,” as when he brought in Pokémon or YouTuber Squeezie for pop-up shops at BHV, says Fabrice Fubert.
The father of a young boy, Merlin asserts his role as “head of the family,” putting himself on the front line to “protect” his sister and his mother, Dominique, SGM’s deputy managing director.
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Politics8 years ago