Africa rises as India’s manufacturing lifeline amid U.S. tariff shock

Africa is emerging as a key manufacturing hub for Indian companies, as record-high U.S. tariffs — now up to 50% — threaten India’s export competitiveness, particularly in textiles, pharmaceuticals, and gems.

The penalties, imposed largely in response to India’s continued oil trade with Russia, have forced Indian firms to pivot strategically toward Africa to maintain access to their largest market. Countries like Kenya, Ethiopia, Nigeria, and Morocco are now drawing Indian manufacturers with incentives including tax holidays, duty exemptions, and low labor costs. Apparel giants like Gokaldas Exports and Raymond Lifestyle have expanded operations in Ethiopia and Kenya, where U.S. tariffs are only 10%. “We will continue to expand in Africa in case of 50% tariffs,” said Gokalda’ Managing Director Sivaramakrishnan Ganapathi.

India’s $87 billion merchandise exports to the United States could shrink by over 40% this year, with more than two-thirds of goods affected. Jewelry exports alone, worth over $10 billion, are under severe pressure. To counter the fallout, New Delhi is accelerating trade diversification under BRICS and Free Trade Agreements with Gulf nations like Oman and Qatar. Commerce Minister Piyush Goyal called the tariffs “unilateral” and vowed not to bow down, launching an Export Promotion Mission to support industry resilience. Africa’s rise as a production base may signal a longer-term shift in global supply chains — one that reshapes India’s trade future.