An executive at Indian textile manufacturer Arvind stated on Thursday that the company anticipates potential margin pressure in the first half of the current fiscal year as they partially absorb the effects of the United States' tariff policy. This follows reports from Reuters indicating that major US retailers have been negotiating with suppliers regarding the allocation of costs resulting from these impending US tariffs.

To mitigate potential margin pressure, Arvind announced its strategy to aggressively pursue cost reductions and volume increases, while also pausing all non-essential and discretionary capital expenditure until the tariff situation becomes clearer. Due to the "prevailing uncertainty," the company refrained from issuing a fiscal year forecast, indicating its intention to provide one "at a later stage.

Despite reporting a substantial 52 percent year-over-year surge in its fourth-quarter net profit to ?1.51 billion ($17.64 million), Arvind's shares experienced a roughly 5 percent decline at the close following these remarks. Conversely, Arvind's vice chairman, Punit Lalbhai, noted during a post-earnings call, "The demand situation is the most robust we have seen in recent memory," highlighting that customers are discussing increased order volumes and earlier placements.

India stands in a relatively advantageous position as the US tariffs slated to take effect in July could more significantly impact larger garment exporters like Bangladesh, Vietnam, and China. According to its annual report, exports accounted for nearly 40 percent of Arvind's total revenue in fiscal year 2024. The company anticipates that some of the potential volume increase could stem from the UK-India free trade agreement, which is expected to unlock a new "key geography," even though the UK currently represents less than 2 percent of its business. ($1 = ?85.5800)