India is adjusting its export approach in response to higher US tariff rates, aiming to offset potential losses. A recent report highlighted a shift in India’s export dynamics due to the impact of 50% US tariffs and the absence of a formal trade agreement. Notably, there has been a notable increase in the export share of marine products to countries like China and Thailand, while electronic goods are seeing a rise in exports to the UAE, and Gems and Jewellery to Hong Kong, as per the Bank of Baroda Report.
The report suggests that while these shifts may seem incremental individually, the collective focus on diversification, global supply chain integration, competitive pricing, and enhanced logistics could help mitigate the adverse effects of higher US tariffs until a formal trade deal is established. The period from April to August 2025 witnessed accelerated frontloading of exports to the US for cost advantages, followed by a subsequent diversification trend from September to November 2025, with exports to other global destinations gaining traction.
Despite these changes, the US remains a crucial export market for India. Looking ahead, there is potential for further diversification, particularly in sectors like readymade garments, gems & jewellery, textiles (excluding readymade garments), and machinery and instruments. The report emphasizes the importance of targeted policy measures to enhance export competitiveness in these sectors, aiming to counterbalance the impact of higher tariffs effectively.
India is gradually expanding its export horizons beyond the US, establishing alternative channels to mitigate the impact of tariffs. The country’s strategic focus on broader geographic outreach reflects a proactive stance in navigating the evolving trade landscape.
