GOKEX

** Indian textile stocks down between 1% and 3%

** Trump executive order imposes additional 25% tariff on goods from India for Russian oil trade

** KPR Mill KPRM.NS leads decline with 2.6% drop, Gokaldas Exports' GOKL.NS down 2.2%

** Welspun Living WLSP.NS, Vardhman Textiles VART.NS Indo Count ICNT.NS down ~2%; Trident TRIE.NS drops 1%

** WLSP, GOKL, ICNT, TRIE derive 40%-70% of their revenues from the U.S.

** They fell 3%-7% on July 31 when Trump announced 25% tariffs on Indian products, along with undisclosed penalty for New Delhi's trade with Moscow

(Reporting by Kashish Tandon in Bengaluru)

(([email protected]))

India File is published every Tuesday. Think your friend or colleague should know about us? Forward this newsletter to them. They can also subscribe here.

Aug 5 - By Nidhi C Sai, Editor Online Production, with global Reuters staff

Trump's trade punches on India appear to be heavy. A sweeping 25% tariff on key exports from the nation and a threat to "substantially" raise it over its Russian oil purchases look set to upend months of negotiations and squeeze labour-intensive sectors in the world's fifth-largest economy.

While those moves are making some Indian companies ponder their future, U.S. firms are unlikely to blink. From Apple AAPL.O to Google, big names are doubling down on India and betting on its long-term promise despite the rising geopolitical heat. That's our focus this week.

We also detail how a Chinese missile, an intelligence lapse, and a surprise strike helped Pakistan shoot down a Rafale fighter jet, marking one of the most dramatic air battles in years. Scroll down for more on that.

THIS WEEK IN ASIA

** South Korea, US prepare for summit with details of trade deal unresolved

** China's independent oil firms elbow into Iraq's majors-dominated market

** Japan ready to compile extra budget to cushion US tariff blow, PM Ishiba says

** China's solar giants quietly shed a third of their workforces last year

** Old trees and ageing farmers worsen outlook for top palm oil exporters

KICKED IN THE TEETH BY US TARIFFS

India is bracing for fresh pain on trade as U.S. President Donald Trump imposed 25% tariffs on a wide range of its goods, treating Asia's third-largest economy more harshly than other major U.S. partners.

And in a move that India said was unjustified, Trump threatened to raise tariffs again over its purchase of oil from Russia.

The tariff imposition is expected to ripple through India's export engine. High-employment sectors, especially readymade garments, gems, jewellery, electronics and marine products, face steep duties in their crucial U.S. market.

"While further trade talks may bring the tariff rate down, it appears unlikely that India will secure a significantly better outcome than its eastern neighbours," said Priyanka Kishore, an economist at Asia Decoded.

Economists warn of a near-term hit to India's growth and sentiment. The rupee weakened after last week's announcement, and some analysts expect up to 40 basis points shaved off GDP in the year to March 2026 if the tariffs stay.

"If these tariffs remain in place, they could undermine India's growing appeal to businesses seeking trade diversion in low-value-added manufacturing sectors," said Raphael Luescher, Co-Head of EM equities at Vontobel.

India's $45.7 billion trade surplus with the U.S., which is equivalent to 1.2% of GDP in 2024, has been a major source of resilience amid global slowdowns. Halving that, some analysts say, could dent the 'safe haven' narrative that's helped India attract global capital even as China cools.

The most immediate pain is in workforce-heavy sectors. Apparel exporters such as Welspun Living WLSP.NS, Gokaldas Exports GOKL.NS, and Indo Count ICNT.NS, who send up to 70% of their output to the U.S., have warned of potential order losses and delayed expansion. Diamond and jewellery firms too are forecasting a slump in shipments ahead of the vital holiday season. The U.S. is India's largest market for garments and jewellery, with nearly $22 billion in exports in 2024.

"A blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain, from lower-level worker to large manufacturers," said Kirit Bhansali, chair of the Gem & Jewellery Export Promotion Council.

The Indian government, under pressure to protect farmers ahead of elections in a key state, has refused to concede on agricultural access - a major U.S. demand. That has stalled trade talks despite months of backchannel engagement. In Parliament, trade minister Piyush Goyal said India remains committed to "protecting and promoting the welfare" of its farmers and entrepreneurs.

US FIRMS LIKELY TO STAY THE COURSE

Even as Trump's latest tariffs threaten to disrupt India's China-plus-one ambitions, U.S. corporate confidence in the country is expected to remain firm, driven by its vast consumer market and limited manufacturing and investment ties to Beijing.

Apple has become more reliant than ever on India to feed its U.S. supply chain. Nearly all of Foxconn's 2317.TW $3.2 billion worth of iPhones exported from India between March and May went to the U.S. Between April and June, 71% of iPhones sold in the U.S. were India-made, up from just 31% a year ago.

"Making supply chain adjustments, particularly with new iPhone models nearing release, is unlikely due to the complex factors involved," said Tarun Pathak of Counterpoint Research. "It is expected to be business as usual."

Apple is not alone. Alphabet's GOOGL.O Google is investing $6 billion in Andhra Pradesh to build Asia's largest data center by capacity, including $2 billion in renewable energy. Drugmaker Amgen's AMGN.O CEO said in February the company will invest about $200 million in an AI-driven innovation hub in southern India, and Tesla TSLA.O launched its Model Y SUV in Mumbai just last month, despite import tariffs in India that can exceed 100% on cars.

U.S. retailer Costco COST.O is also joining the fray, with plans to open its first Global Capability Centre in Hyderabad, focused on technology and research operations that will initially employ 1,000 people and scale up.

India's growing local component ecosystem, wage levels around half of China's, and federal incentives make it more cost-competitive than ever, especially in tech and electronics manufacturing. In sectors such as pharmaceuticals and chemicals, exposure to the U.S. remains high, but players are already seeking workarounds or shifting supply chains to protect earnings.

In this standoff, short-term pain may sting India, but long-term positioning is still in play. Talks are expected to resume in mid-August, and while a quick breakthrough may not materialise, analysts say the fundamentals of India's economic story remain intact.

Sign up for the Reuters Tariff Watch newsletter here.

Can India shield its politically sensitive farm sector and stop its Russian oil purchases while keeping its trade ties with Washington from unravelling? Or will economic pragmatism force a compromise in the face of Trump's tariff shock? Write to me at [email protected].

THE WEEK'S MUST READ

A Chinese-made missile and an intelligence lapse helped Pakistan shoot down a Rafale fighter jet during a major India-Pakistan aerial clash in May, officials said. The Pakistani J-10C fired a PL-15 missile from around 200 km (124.3 miles), farther than Indian pilots had expected, after Delhi underestimated the missile's true range. The hour-long battle, involving about 110 aircraft, followed Indian strikes on Pakistan after a deadly militant attack in Indian Kashmir.

Pakistan used a "kill chain" linking Chinese jets, radar, and surveillance planes to track Indian aircraft without detection.

The incident raised doubts over Western fighter jets' dominance and boosted interest in Chinese alternatives like the J-10.

Dive into this insight by Reuters journalists Saeed Shah and Shivam Patel on how Pakistan brought down India's top fighter jet with Chinese tech.

MARKET MATTERS

Indian banks are tightening consumer lending just as rate cuts kick in, raising fears that cautious credit and weak household finances could dampen a consumption-led recovery.

Lenders are slowing disbursals for personal loans, credit cards, and vehicle financing. Growth in these segments slipped to single-digit percentage in May, from between 15% and 26% a year earlier, Reserve Bank of India data showed.

Top privately owned banks such as HDFC Bank HDBK.NS, ICICI Bank ICBK.NS, Axis Bank AXBK.NS, and Kotak Mahindra Bank KTKM.NS as well as large non-bank lender Bajaj Finance BJFN.NS have seen bad loans rise in the April-June quarter, hitting their bottom lines.

Read this in-depth report by Reuters journalists Jaspreet Kalra and Ashwin Manikandan.

(Reporting by Nidhi C Sai; Editing by Muralikumar Anantharaman)

(([email protected]; +91 70456 55251))

By Manoj Kumar, Rajendra Jadhav and Dhwani Pandya

NEW DELHI/MUMBAI, July 31 (Reuters) - India's apparel and jewellery exporters are bracing for a drop in orders from their biggest market and could cut jobs after U.S. President Donald Trump announced a 25% tariff on Indian imports starting on Friday, industry executives said.

Several garment exporters, who had hoped for a bilateral trade deal and were preparing for a rise in orders from U.S. retailers such as Walmart and Costco, have now halted expansion plans as they await the outcome of negotiations, they said.

Key garment exporters including Welspun Living WLSP.NS, Gokaldas Exports GOKL.NS, Indo Count ICNT.NS and Trident TRIE.NS, make 40%-70% of their sales in the United States. Higher tariffs could shift orders to Vietnam, which now has lower U.S. duties of 20%.

The United States is India's largest market for garment and jewellery, with nearly $22 billion in exports in 2024. India has a 5.8% share in the U.S. garment market, behind China, Vietnam and Bangladesh.

"We were getting ready for expansion, expecting 10%-15% tariffs under the U.S. deal," said Gautam Nair, director at Matrix Design and Industries Pvt Ltd, a subsidiary of India's largest garment exporter Gokaldas Exports.

Gokaldas U.S. clients include GAP, Walmart WMT.N and JCPenney.

"Trump's tariff announcement has come as a shock, and if implemented, the 25% duty will severely impact exports," Nair said, adding that India's apparel sector already faces higher costs than leading competitors Bangladesh and Vietnam.

'IMMENSE PRESSURE'

In Tirupur, a textile hub in southern Indian concerns are mounting, with exporters pinning their hopes on a bilateral trade deal to put a quick end to the uncertainty.

The two countries are still holding talks in a bid to reach a deal.

"If U.S. business declines, factories will start poaching each other's customers," said Naveen Michael John, executive director at Cotton Blossom India, which supplies Walmart and Bass Pro Shops.

India's gems and jewellery sector, also heavily reliant on U.S. buyers, is already under pressure. Exports of cut and polished diamonds sank to their lowest in nearly two decades in the 2024/25 fiscal year due to weak U.S. and Chinese demand.

The U.S. accounts for nearly one-third of India's $28.5 billion in annual gems and jewellery exports.

"A blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain - from lower level worker to large manufacturers," said Kirit Bhansali, chair of the Gem & Jewellery Export Promotion Council (GJEPC).

Looking ahead to the U.S. holiday season, exporters are urging the government to find a way to restore stability before September, giving them time to ramp up seasonal production.

"Without a trade deal, exports won't recover," said one jewellery exporter in Surat, India's diamond-polishing hub.

"We'll be forced to cut production and jobs."

(Reporting by Manoj Kumar, Rajendra Jadhav, Dhwani Pandya;
Editing by Helen Popper)

(([email protected]; +919810286200; Twitter:@manojgulnar;))

** Shares of India's textile makers rise after Britain and India sign major trade agreement

** India's trade ministry said 99% of Indian exports would benefit from zero duty under the deal, including textiles

** Textile makers Gokaldas Exports GOKL.NS, Arvind Ltd ARVN.NS, K.P.R. Mill KPRM.NS, and Kitex Garments KITE.NS were up 7.2%, 3.3%, 7.9%, and 5%, respectively

** "India has advantage of cheap labour cost and high cotton supply, which benefit the domestic textile producers in long run," ICICI Securities said

** Adds, cos with integrated business model and high standards of quality production like Gokaldas Exports, KPR Mills, SP Apparels, Indo Count ICNT.NS and Welspun Living WLSP.NS will benefit from the pact in medium to long run

** ICNT jumps 6.5% and WLSP gains 7.3%

** ICICI Securities also says lower tariffs on footwear products is positive for Indian footwear companies such as Bata India BATA.NS, Metro brands METB.NS, Relaxo footwear RLXO.NS to explore opportunities in the UK market

(Reporting by Vijay Malkar)

(([email protected];))

** Textile stocks gain between 4% and 9%; Vardhman Textiles VART.NS, with presence in more than 75 countries, top gainer, soaring 8.9%

** Arvind ARVN.NS rises 4.3%, KPR Mill KPRM.NS advances 6.5%, Nitin Spinners NISP.NS jumps 4.45% and Gokaldas Exports gains 8.16%

** Donald Trump's 26% reciprocal tariffs on India lower than those on competitors like Bangladesh (37%), Vietnam (46%) and Cambodia (49%)

** Ajay Sahai, Director General at Federation of Indian Export Organizations, says, "We will be looking for some diversion of business from other countries to India"

** "For India, the advantage is a potential bilateral trade agreement with the U.S."

** Tiruppur Exporters' Association, seeking certain quantity of duty-free cotton exports to the U.S., says it is in talks with ministries

(Reporting by Ananta Agarwal in Bengaluru and Praveen Paramasivam in Chennai)

(([email protected]))

** Shares of Indian textile companies and garment makers surge between 3-11%

** Welspun Living WLSP.NS climbs 9%, Trident TRIE.NS up 8%, Gokaldas Exports GOKL.NS jumps 11%

** KPR Mill KPRM.NS rises 6%, Arvind ARVN.NS gains 4.3%, Arvind Fashions ARVF.NS is up 3.5%, Go Fashion GOFA.NS gains 3%

** Political unrest in Bangladesh is expected to disrupt the country's clothing industry, potentially affecting global apparel retailers

** Bangladesh was the third-largest clothing exporter in the world last year

** There are some hopes that because of political unrest, big brands outsourcing their manufacturing in Bangladesh may see India as an option - Pratik Tholiya, analyst with Systematix

** Some of the business may come to India. But, the manufacturing setup in India is not as robust as Bangladesh - Tholiya

(Reporting by Sethuraman NR in Bengaluru)

(([email protected]; (+91 9945291420); Reuters Messaging: [email protected]))

April 25 (Reuters) - Gokaldas Exports Ltd GOKL.NS:

• ONE CUSTOMER OF UNIT FILED FOR BANKRUPTCY PROTECTION IN USA COURT

• CUSTOMER HAS AN OUTSTANDING RECEIVABLE OF $ 1.75 MILLION AS OF DATE

Source text for Eikon: ID:nBSE1bYfw

Further company coverage: GOKL.NS

(([email protected];))

** Shares of apparel maker and exporter Gokaldas Exports GOKL.NS up 4% at 946 rupees

** Co said it will acquire apparel business of Matrix Clothing for an enterprise value of 4.89 bln rupees ($59 mln)

** GOKL reported 25% y/y fall in Q3 profit after tax

** Co has been trading over its 200-day simple moving avg since late-April 2023; trading vol at 1.4x the 30-day avg

** Avg rating of six analysts equivalent of "strong buy", while median PT of seven is 973 rupees - a ~18% premium to last close - LSEG

** Only ICICI Direct's PT is a discount to the last close, while it has no rating on the stock - LSEG

** GOKL gained over 125% in 2023; logged fourth straight year of gains - its longest streak ever

($1 = 82.8525 Indian rupees)

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

** Shares of Gokaldas Exports GOKL.NS up as much as 13.7% to hit an all-time high of 696.75 rupees in heavy vols

** The Indian apparel manufacturer and exporter said it will buy Dubai-based apparel maker Atraco Group for $55 mln

** Says deal to give it access to "low-cost duty-free" manufacturing locations

** Trading vol by 09:34 a.m. IST is 4.6x the 30-day moving avg

** Six of the seven analysts covering GOKL rate it "buy" or "strong buy", while one rates it "hold"; median PT is 595 rupees

** Stock last up about 13% taking YTD gains to about 89%

(Reporting by Kashish Tandon in Bengaluru)

(([email protected]))

** Shares of Gokaldas Exports Ltd GOKL.NS fall as much as 5.1% to 482.05 rupees, biggest intraday pct. loss since May 26

** Apparel manufacturer on Monday said consolidated Q1 profit fell 17.4%; revenue from operations down 15.7%

** Continue to anticipate sluggish demand for H1FY24, with momentum picking up subsequently - GOKL in a statement

** Trading volume at ~528,800 shares as of 12:35 p.m. IST, 2.3x the 30-day avg of ~233,200 shares

** Average rating of seven analysts equivalent to 'buy'; median PT is 585 rupees - Refinitiv data

** Stock up ~37% so far this year

($1 = 82.7610 Indian rupees)

(Reporting by Biplob Kumar Das in Bengaluru)

(([email protected]))

Aug 7 (Reuters) - Gokaldas Exports Ltd GOKL.NS:

• GOKALDAS EXPORTS LTD - RE-APPOINTED SIVARAMAKRISHNAN GANAPATHI AS MANAGING DIRECTOR

• INDIA'S GOKALDAS EXPORTS LTD JUNE-QUARTER CONSOL NET PROFIT 325.5 MILLION RUPEES VERSUS PROFIT 393.9 MILLION RUPEES

• GOKALDAS EXPORTS LTD JUNE-QUARTER CONSOL REVENUE FROM OPERATIONS 5.15 BILLION RUPEES VERSUS 6.11 BILLION RUPEES

Source text for Eikon: ID:nBSEbr0F5z

Further company coverage: GOKL.NS

(([email protected];))

** Indian textile sector poised to ride the next upcycle as home textiles and readymade garments players gain market share in key export markets of U.S., Europe amid receding global retail inventories, says brokerage Sharekhan

** Upgrades view on textile sector to "positive" from "neutral", citing brighter industry outlook from 2H of FY24

** "China Plus One" strategy, potential free trade agreements, falling cotton, crude prices can help earnings grow 20%-41% over FY23-25, for cos with focus on exports, higher capacity utilisation - Sharekhan analysts

** Gokaldas Exports Ltd GOKL.NS, KPR Mill Ltd KPRM.NS and S.P. Apparels Ltd SPAP.NS preferred picks in garment space, Himatsingka Seide Ltd HMSD.NS in home textile space

** Also initiates coverage on GOKL with "buy" rating, price target of 635 rupees

(Reporting by Nandan Mandayam in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))

June 7 (Reuters) - Gokaldas Exports Ltd GOKL.NS:

• UNIT GOKALDASEXPORTS ACHARPURA COMMENCED ITS COMMERCIAL PRODUCTION EFFECTIVE JUNE 7

• ON ACHIEVEMENT OF FULL RAMP-UP AND PRODUCTIVITY, UNIT WILL CONTRIBUTE ABOUT 5% TO CO'S CURRENT CAPACITY

Source text for Eikon: ID:nBSE2BW1Nv

Further company coverage: GOKL.NS

(([email protected];))