India's Export Diversification Cushions Impact of US Tariffs
India's export strategy has successfully diversified its markets beyond the US, with growing exports of cotton garments, marine products, and gems and jewellery to countries like the UAE, France, and Japan. This shift mitigates the negative effects of increased US tariffs, helping sustain overall merchandise export growth as India targets 50 nations to reduce market dependency.
India is responding proactively to the substantial increase in US tariffs on its exports, which rose from 25% to 50%, by diversifying its export markets and reducing reliance on the US. The government’s export diversification strategy focuses on expanding into about 50 countries, including key markets in West Asia, Africa, Europe, and Asia, such as the UAE, France, Japan, Vietnam, Belgium, and Saudi Arabia. Key sectors benefiting from this shift include cotton readymade garments, marine products, and gems and jewellery, which have reported sharp export growth in these new markets. This strategic redirection not only cushions the impact of the high tariffs imposed by the US but also promotes sustainable trade growth by leveraging India's strengths in manufacturing and export competitiveness. India’s merchandise exports saw positive overall growth, supported by increased shipments in non-US destinations, helping offset losses from the US market. The move aligns with broader reforms, digital transformation, and governmental schemes aimed at making India a more resilient and globally competitive exporter in sectors like electronics, pharmaceuticals, textiles, and engineering goods. This diversified export approach is critical to maintaining trade momentum amid geopolitical and tariff-related challenges while fostering broader international commercial relationships.
