Is India Diversifying Its Export Basket to Counter Rising US Tariffs?
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Synopsis
India is taking strategic steps to diversify its export basket in response to rising US tariffs. This adjustment aims to reduce economic impact through enhanced global integration and improved logistics. Discover how India is reshaping its export landscape.
Key Takeaways
- India is diversifying its export basket to mitigate the effects of higher US tariffs.
- There has been a significant increase in exports to countries like China and Thailand.
- Frontloading of exports to the US has been accelerated to gain cost advantages.
- Future growth potential lies in sectors like gems and jewellery and machinery.
- India is working towards reducing its reliance on the US market.
New Delhi, Jan 2 (NationPress) To help cushion the impact of increased US tariff rates, India’s export structure has been adjusting through frontloading and rerouting of shipments due to the evolving tariff landscape, according to a report released on Friday.
India is witnessing a fundamental transformation in its export basket as a reaction to 50% US tariffs and the lack of a formal trade agreement.
For marine products, there has been a noticeable rise in the share of exports to countries like China and Thailand. For electronic goods, exports to the UAE have increased, while exports of gems and jewellery have surged significantly towards Hong Kong, as highlighted in the Bank of Baroda Report.
“Although these shares may seem minimal individually, collectively, with a greater emphasis on diversification, integration into global supply chains, competitive pricing, and enhanced logistics, a more robust substitution effect could partially mitigate the adverse effects of the higher US tariff rates until a formal trade agreement is established,” stated Dipanwita Mazumdar, an Economist at the Bank of Baroda.
From April to August 2025, there was an expedited frontloading of exports to the US to gain cost advantages. The subsequent period, from September to November 2025, reflects a degree of diversification, with exports to the rest of the world (excluding the US) increasing while exports to the US were somewhat reduced.
Nonetheless, the US remains a significant export market, the report noted.
Looking ahead, there is still potential for further diversification, particularly in sectors like ready-made garments, gems and jewellery, textiles (excluding ready-made garments), and machinery and instruments.
“These sectors are crucial for targeted policy measures aimed at enhancing export competitiveness. Such initiatives could assist in alleviating the output loss resulting from elevated tariff rates,” the report emphasized.
Overall, while the US continues to dominate as an export destination, India is progressively establishing alternative channels through broader geographic engagement to lessen the tariff impact.
Point of View
Our stance remains aligned with national interests. The report underscores India’s proactive approach to economic challenges, emphasizing the importance of diversifying exports to ensure resilience against external pressures. This strategy not only promotes economic stability but also strengthens India’s position in the global market.
NationPress
02/01/2026
Frequently Asked Questions
What are the main countries India is exporting to?
India is increasing its export share to countries like China, Thailand, the UAE, and Hong Kong, particularly in marine products, electronics, and gems and jewellery.
How is India mitigating the impact of US tariffs?
India is implementing frontloading and rerouting of exports, focusing on diversifying its export basket to reduce dependence on the US market.
What sectors hold potential for growth in exports?
Sectors such as ready-made garments, gems and jewellery, textiles, and machinery are identified as having significant potential for export growth.
