Asia has been reaping the fiscal benefits of its exports in various industries (including clothing and gadgets) for many years. Orient Craft Ltd. is one such factory that employs 400 workers, manufacturing ladies clothing that is sent to Ann Taylor, Gap and J. Crew among others.
Located just outside of New Delhi, Orient Craft is one of 26 such facilities in India. Assembled they export around 250,000 items of clothing EACH day. Over 60 percent of these go to America. Annual revenues today stand at over $300 million.
Clearly there are indications that there is just huge demand from the west for everything Asian. But the question is, will this last?
Politically, things in the west are changing and concerns are coming up that this could negatively impact the demand for Asian exports. First, Trump promised to bolster US jobs by scaling back on imports. Those most impacted by this would be in Asia, specifically in China, Japan, South Korea and Vietnam – regions that have the largest bilateral trade surpluses.
As such, founder of Orient Craft Sudhir Dhingra is concerned. He noted that: “The US under Trump could impose some additional duties, that’s a worry. People will find out that you can’t move everything back home. People won’t pay those prices.” And on a more global level for Asia, exports are exceedingly important. Being the world’s fastest growing economy (around 30 percent of international growth) Asia relies heavily on trade. Indeed, when looking at the UK, one such problem could arise for Japanese auto manufacturers manufacturing cars in the U.K. and selling them to the British who want to avoid tariffs on these if exported into the EU.
Right now, things are good for Asia and its export economy. But it is advisable for the region to start looking at how to shake things up as things evolve.