US Tariffs: Gokaldas Exports Prioritises Shipping, Says Q3 Orders To Be Renegotiated
While firms are being forced to look for new export destinations, the challenge is that it is not easy to diversify in a short time, the MD said.
The looming 50% US tariffs on Indian exports will lead to renegotiation of orders in the third quarter of FY26, according to Sivaramakrishnan Ganapathi, Vice Chairman and Managing Director of Gokaldas Exports.
The immediate priority for exporters is to ship existing orders before the additional 25% tariff kicks in.
“Whatever we can ship before that extra 25% kicks in, that will always be prioritised. Till early October, we have orders that were already booked and are contractually closed. However, third-quarter orders are now under discussion and renegotiations are underway,” he said during a conversation with NDTV Profit on Friday.
While firms are being forced to look for new export destinations, the challenge is that it is not easy to diversify in a short time, the MD said.
“The issue is India exports about $5 billion and it's hard to find that much capacity elsewhere in the world at short notice; nobody is keeping so much capacity vacant,” Ganapathi said.
He remains cautiously optimistic, hoping for a resolution within the next 90 days that could lead to tariff rationalisation. “The ideal outcome would be resolving this before the additional 25% tariff takes effect,” the top executive said.
With the United States accounting for 72% of Gokaldas Exports’ consolidated revenue, the company is actively seeking to diversify its markets. Ganapathi highlighted a notable increase in the contribution of Europe to the company’s business in the first quarter of this financial year.
However, he cautioned that reducing US dependency from 72% to 50% of consolidated revenue could take one to two years.
“It will take a minimum of a year or more likely two years to get there. It's not easy to just pivot out at the snap of our fingers. Most of the new clients we onboard take a year to ramp up,” he added.
When asked whether the company would sacrifice margins to maintain US sales, Ganapathi said, “We may be willing to forsake a portion of margins, but we must stay relevant and continue investing in the business. There will be negotiations and it’s too early to speculate as to which way mutual give and take will happen.”
Shares of Gokaldas Exports were trading 2.57% lower at Rs 704 apiece on the NSE at 12:26 p.m., while benchmark Nifty50 stood at 24,421, down 0.71%.
