US customers demand discounts as tariff hike disrupts pricing for Indian exporters

US customers are asking for discounts of 15-25% on products ordered before Trump’s tariff changes threw pricing into disarray. While large retailers with long-term contracts haven’t altered their sourcing plans, Indian exporters are finding that some of their orders are being delayed.

Customers in the United States are putting pressure on the company to cover or split the extra expenses they will have to pay for both pending and ongoing orders. On the ground, buyers and exporters are confused, according to Rahul Mehta, chief mentor at the Clothing Manufacturers Association of India (CMAI).

As Americans put off purchases, the true concern is the erosion of demand, particularly in industries like textiles or gems and jewelry where discretionary spending is involved.

The industry is worried about a downturn in new orders. According to one exporter, rising tariffs may also put strain on US purchasers' liquidity, particularly for smaller ones, as they will have to pay higher customs duties all of a sudden.

International fashion labels are reconsidering their approaches. They are currently adjusting costs; to counteract the tariff increase, a number of US buyers have requested price reductions or changes from Indian suppliers.

According to Kashika Malhotra, head of business development at Brandman Retail, an Indian distributor of US goods like Jansport and Timberland, "We are also hearing that some buyers and Indian exporters have struck deals to split the additional tariff burden."

"Some of our buyers are in a huddle and will begin negotiations next week. But indications are that they will suggest a three-way split between the seller, buyer, and consumer. In our business, margins are so low that it's tough to offer any discount," said a leading garment exporter.

Schedules are being juggled by factories on the ground; some shipments to the US are delayed, and businesses are likely to postpone significant growth or procurement decisions until more clarity is available.

"Overall, global retailers are concerned and making tactical adjustments, but India remains very much on their sourcing map. The consensus is to work with Indian partners on solutions," Malhotra said.

"Although we have not seen significant shifts yet, the recalibration has begun... India, though impacted, still has an inherent edge, especially when peers like Vietnam and Bangladesh face steeper duties," said Shiraz Askari, president at Apollo Fashion International.