How is India Diversifying Its Export Market to Combat US Tariff Increases?
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Synopsis
India's export market is thriving as it successfully diversifies its overseas shipments amidst rising US tariffs. With a remarkable year-on-year growth in various global markets, India is strategically positioning itself for future trade. Discover how this shift is shaping the country's economic landscape.
Key Takeaways
- India's export market is diversifying effectively across multiple regions.
- Merchandise exports increased by 9% during the July-September quarter.
- High-value sectors like electronics are leading the growth.
- India is negotiating with the US to resolve trade tariff issues.
- FTAs with the UK and Europe will bolster export diversification.
New Delhi, Oct 21 (NationPress) India has effectively diversified its export market, achieving a year-on-year increase in overseas shipments across more than 20 nations in Europe, the Middle East, Africa, and Latin America, which has significantly mitigated the negative effects of the US tariff challenges.
This progress is evident in the 9 percent rise in India’s merchandise exports during the July-September quarter of the current fiscal year.
Despite the recent 50 percent hike in US tariffs, India's export performance remains robust, with merchandise exports increasing by 6.7 percent year-on-year in September, driven by strong growth in high-value sectors such as electronics, engineering goods, and marine products.
The 24 countries that noted an increase in Indian exports include Germany, Belgium, Italy, Poland, South Korea, the UAE, Oman, Iraq, Egypt, Russia, Canada, Mexico, Brazil, Kenya, Nigeria, Tanzania, Thailand, Vietnam, and Sri Lanka.
Exports to these nations showed positive growth from April to September 2025-26, reaching $129.3 billion, which accounts for a 59 percent share of India's total exports, as per data from the Commerce Ministry.
India’s free trade agreements (FTAs) with the UK and Europe are projected to further bolster this diversification in the nation's export landscape.
In contrast, India's merchandise exports to the US fell by 11.93 percent to $5.46 billion in September due to the tariff increases imposed by the previous Trump administration.
Simultaneously, India and the US are engaged in negotiations to establish a bilateral trade agreement aimed at overcoming the current deadlock. Both nations have made progress in their discussions to address tariff issues, even though New Delhi has expressed that it will not rush into a deal.
India’s trade delegation, headed by Commerce Secretary Rajesh Agrawal, reportedly conducted productive meetings with US officials in Washington last week, according to a senior source.
While the US under Trump took a firmer stance on Russian oil purchases by India, New Delhi has reassured Washington that Indian firms will increase acquisitions of American oil and gas. As the second-largest consumer of oil and gas globally, these imports could help alleviate the US's trade deficit with India, a concern raised by Washington.
Commerce and Industry Minister Piyush Goyal has stated that the ongoing discussions with the US are taking place in a “very cordial atmosphere,” but are not bound by strict deadlines.
“There will be no agreement unless we fully consider the interests of India's farmers, fishermen, and the MSME sector,” the minister emphasized.
Point of View
It's vital to highlight India's strategic shift in export markets. This diversification not only mitigates the risks posed by US tariffs but also opens new avenues for trade and economic growth. India must continue to prioritize its farmers, fishermen, and MSME sector to ensure that trade agreements serve the nation's broader interests. Our focus should remain on fostering a sustainable and inclusive trade environment.
NationPress
21/10/2025
Frequently Asked Questions
What countries are benefiting from India's export diversification?
India's export diversification has positively impacted over 20 countries, including Germany, Belgium, Italy, Poland, South Korea, the UAE, and more.
How have US tariffs affected India's exports?
The recent 50 percent increase in US tariffs has led to an 11.93 percent decline in India's exports to the US, amounting to $5.46 billion in September.
What sectors are driving India's export growth?
High-value sectors such as electronics, engineering goods, and marine products are primarily driving India's export growth amid diversification efforts.
How do FTAs impact India's export market?
India's free trade agreements (FTAs) with the UK and Europe are expected to strengthen its export diversification and enhance trade relationships.
What is India's strategy for dealing with US trade relations?
India is currently in negotiations to establish a bilateral trade agreement with the US, focusing on addressing tariff issues and fostering constructive dialogue.
