India’s move to diversify its exports to mitigate Trump’s steep 50% tariffs is gradually becoming fruitful, as reported by the Economic Times. By the end of September, India’s export of cotton garments to the United Arab Emirates (UAE), France, and Japan had increased, even as shipments to the US fell 25 percent year-on-year.
Overall, India’s merchandise exports rose 6.7 percent year-on-year to $36.38 billion in September. However, exports to the US, which is India’s largest trading partner, fell 11.93 percent to $5.46 billion during the same month. Although the US accounts for 18–20 percent of India’s total merchandise exports, certain sub-sectors remain highly dependent on the American market. 60 percent of India’s carpet exports, 50 percent of made-ups, 30 percent of gems and jewelry, and 40 percent of apparel exports are destined for the US.
The official data shows that for the month of September, marine product exports to the US declined 26.9 percent, while those to China, Vietnam, and Thailand surged by over 60 percent. Similarly, exports of certain gems and jewelry, basmati rice, tea, carpets, and leather goods fell in the US market but registered an uptick in other destinations.
For instance, export of tea to the US in the month of September fell by 22% year-on-year, while exports to the UAE, Iraq, and Germany increased.
Exports of basmati rice to Iran rose sixfold to $41.07 million, offsetting some of the decline in the US market.
Exports of handmade carpets to the US dropped 26 percent but increased to Canada and Sweden in September.
Ajay Sahai, director general of the Federation of Indian Export Organizations (FIEO), stated that export diversification is healthy for the growth of India’s exports.
The ministry of commerce, as part of its market diversification drive, has identified 40 key importing countries across North America, Europe, Asia, Africa, Latin America, and Oceania, which together account for nearly three-fourths of global textile and apparel demand.
The ministry is developing outreach programs to expand 5–6 percent of the market in these countries.
In August this year, the US had imposed a 25 percent tariff on all Indian-origin goods, which was then doubled by Trump to 50 percent from August 25. Currently, both nations are negotiating a bilateral trade agreement (BTA) with the goal of boosting bilateral trade to $500 billion by 2030.
