Gokaldas Exports Targets Europe at 30% of Sales on India-EU Trade Deal

Gokaldas Exports expects Europe to double its share of company exports, from roughly 15% today to 25%-30% within three to five years, as it positions itself for a proposed India-European Union trade agreement expected to be signed by the end of 2026.

The plan is a deliberate hedge. The United States currently accounts for 69% of Gokaldas Exports' shipments, and the company wants that concentration to shrink over time, though it has set no specific reduction target. The stated motive is tariff-related disruption and policy uncertainty in Washington — the kind of exposure that keeps sourcing directors awake.

Vice-Chairman and Managing Director Sivaramakrishnan Ganapathi put the arithmetic plainly. "Europe accounts for around 15% of our exports. Over the next three to five years, we expect Europe's share to increase to approximately 25% to 30%."

The company is already holding discussions with major European retailers in preparation for potential duty-free trade. The EU-India agreement, if concluded on schedule, could reduce tariffs on Indian apparel exports into the bloc — a cost advantage that would flow directly to buyers weighing India against Bangladesh, Vietnam and Turkey.

Where the money goes

Gokaldas Exports, whose customers include Gap, Carhartt and JCPenney, plans to invest Rs. 1.25 billion — about US$13.2 million — in fiscal 2027 to expand overall capacity and upgrade existing facilities. Notably, the investment stays in India. The company is expanding domestic manufacturing capacity rather than shifting production to other countries, a decision that runs against the recent habit of spreading orders across a wider country matrix.

For vendors weighing the same choice, US$13.2 million is a modest sum by multinational standards, but it signals confidence that Indian capacity can serve both an EU-facing growth curve and a large, if shrinking, American book.

What does the US market signal?

The backdrop is not encouraging. US apparel imports from across the world fell 7% to US$49.08 billion during January-August, according to government data. In plain terms, American buyers spent roughly US$3.7 billion less on imported clothing in the first eight months of the year than in the comparable prior period.

Yet Gokaldas Exports reports firmer conditions at the order level. The company has booked stronger US orders for the spring-summer 2027 season than it saw for the 2026 holiday season, and its shipments from India to the US rose 3%-4% year-on-year during the 2026 holiday period.

So the macro is soft while this factory's book is not — at least for now. That divergence may reflect share gains within a shrinking import pool, or a seasonal ordering pattern; the company has not said which.

What does this change for buyers?

For European retailers, an India-EU deal by end-2026 would place Gokaldas — a Gap and Carhartt supplier with expanding domestic capacity — in the duty-free column. For US brands, it means a key Indian vendor actively rebalancing toward Europe, which may affect allocation priority as the spring-summer 2027 cycle unfolds.

The conversion from 15% to 30% remains a projection, not a signed contract. The timeline now rests on trade negotiators in Brussels and Delhi, and on whether US demand holds.