Our Bureau
Mumbai
Last week, Amit Agarwal, the Group Chief Financial Officer (CFO) of Textile major Raymond Ltd. has revealed that his company is being very cautious in this “volatile situation”. The CFO revealed that after the imposition of these huge tariffs on India by the President of the United States, Donald Trump, Raymond is not hastily moving towards a newer approach.
Agarwal stated that he thinks there should not be a “knee-jerk reaction based on one announcement made by the White House.” He also revealed that his company is planning to take a more long-term approach to the current situation.
More than half of Raymond’s revenue comes from the US while 30% production of the firm is based in Ethiopia which continues to enjoy very low import duties at 10%. So the company might plan to shift their business from India to Ethiopia. Other than that they can also export fabrics to Bangladesh and Vietnam for garment production and subsequent shipment to the United States.
“We have a long-term play. Out of our total garmenting revenue, almost 50-55% comes from the United States. Of that, almost 30% production is coming from our Ethiopian plant and Ethiopia continues to be at the lowest duty rate of 10%. The Ethiopian plant still has the capacity of another Rs 50 crore to Rs 75 crore, so we can transfer the business out of India into Ethiopia,” he said.
He also pointed out that these import duties will also be challenging to the US retail market with the holiday season approaching soon. The Thanksgiving and Christmas sales season is just 4 months away so they will also try necessary ways to get products from India to meet their requirements.
“In the US, they go for a Thanksgiving sale and a Christmas sale and the time for that is less than four months now. They would not be able to meet their requirements for this period. So, I think to that extent, they will find ways to get the products out of India,” the Group CFO noted.
