India's export sector is undergoing a significant transformation, with a strategic shift towards diversifying export markets to mitigate the impact of increased tariffs and protectionist measures from the United States. This diversification strategy focuses on expanding trade links with Southeast Asia, Africa, Latin America, and the European Union. The proactive measures taken by Indian exporters to explore alternative markets have begun to yield positive results, with non-US markets increasingly compensating for the loss of exports to the US.
The change in strategy has been driven by the imposition of higher tariffs on Indian goods by the US, with rates rising from 25% to 50% on some commodities. This increase in tariffs has affected key sectors such as textiles, leather, marine products, and gems and jewellery, making Indian products less competitive in the US market compared to exporters from countries like Turkey, Vietnam, and Thailand.
In response to these challenges, India has strategically focused on 50 nations in West Asia and Africa to reduce reliance on any single buyer and cushion the blow from steep US import tariffs. These markets together account for approximately 90% of India's total exports. The government has also initiated an "Export Promotion Mission" in the Union Budget 2025-26, with a support of ₹2,250 crore, aimed at providing better access to export credit, enhancing cross-border factoring, and assisting exporters in managing regulatory and cost burdens of trade.
The diversification efforts have led to notable increases in exports to various non-US destinations. Exports of textiles, gems and jewellery, and marine products to countries like the UAE, Vietnam, Belgium, and Saudi Arabia have recorded sharp increases, driven by rising demand across Asia, Europe, and West Asia. Marine exports, in particular, saw a 15.6% year-on-year increase during January-September 2025, primarily fueled by surging demand in non-US destinations. Similarly, textile exports are making inroads into new and emerging markets such as Peru and Nigeria.
India is also rebalancing its product and sectoral focus, with more emphasis on industries that have been exempted or less impacted by the latest US tariffs, such as pharmaceuticals, electronics, and energy. Furthermore, efforts are being made to diversify the export basket away from traditional products like textiles and jewellery towards value-added products like specialty chemicals, processed food, and advanced manufactured components.
To support these changes, infrastructure and supply chain initiatives have been accelerated, with improvements in ports, logistics corridors, multimodal transport, and export infrastructure aimed at lowering the time and cost of exports. The government is also working to simplify export procedures, improve trade facilitation, and eliminate non-tariff barriers through changes in the Foreign Trade Policy (FTP) 2023-28.
While the US remains a significant export destination, the decline in exports to the US and the corresponding growth in non-US markets highlight a crucial shift in global trade dynamics. This diversification is not only a reaction to tariffs but also a long-term plan to enhance India's presence in the international market. By expanding its export footprint to new global markets, including the Philippines, Indonesia, the United Kingdom, and Mexico, India aims to unlock potential opportunities and strengthen its position in global food supply chains.
In conclusion, India's strategic diversification of export markets is proving effective in offsetting the impact of US tariffs and fostering growth in non-US destinations. This proactive approach, coupled with supportive government policies and infrastructure development, positions India to maintain its momentum in the global export arena.
