India charts new trade routes to offset steep US tariffs
Experts have warned that India’s exports to the US could drop sharply.
Experts have warned that India’s exports to the US could drop sharply.
Experts have warned that India’s exports to the US could drop sharply.
In a strategic move to offset the steep 50 per cent tariff imposed by the United States on Indian goods, New Delhi is planning a targeted outreach programme across 40 countries to boost textile and apparel exports.
The initiative will focus on markets such as the UK, Japan, and South Korea- countries that collectively account for over $590 billion in textile and apparel imports, according to PTI. With India currently holding only a 5–6 per cent share in these markets, the initiative aims to significantly expand its global footprint in the sector.
Moreover, the Commerce Ministry is holding consultations this week with sectors like chemicals, gems and jewellery to explore ways to boost exports to new markets. "In the next 2–3 days, the ministry will meet stakeholders to discuss export diversification," a government official told PTI.
The additional 25 per cent penalty on top of the existing 25 per cent tariff, which took effect on Wednesday, is expected to disrupt Indian exports to the US, New Delhi's largest export market. Exporters say the textile sector- with exports worth $10.3 billion— will be hit the hardest. Meanwhile, competitors like Bangladesh, Thailand, Vietnam, and Indonesia face lower US duties.
Experts have warned that India’s exports to the US could drop sharply to around $49.6 billion in FY26, following Washington’s new tariff regime.
In response, exporters have urged the government to diversify trade partnerships and fast-track free trade agreements (FTAs) with the EU, Oman, Chile, Peru, GCC nations, Africa, and other Latin American countries. They have also called for early-harvest agreements, especially for labour-intensive sectors, to be prioritised.
Additional demands include a one-year moratorium on loan repayments, expansion of Production-Linked Incentive (PLI) schemes, infrastructure upgrades, and investments in cold-chain and storage facilities to enhance global competitiveness.
Despite the tensions, New Delhi and Washington are in talks to resolve the ongoing tariff issues, keeping in view the long-standing ties between the two countries. Government officials told PTI that the impact of the higher tariffs may not be as severe as initially feared, due to the diversified nature of India's exports.
Meanwhile, in an interview with Fox Business, US Treasury Secretary Scott Bessent has described the India-US relationship as "very complicated" but hoped that "at the end of the day, we will come together".
"This is a very complicated relationship. President (Donald) Trump or Prime Minister (Narendra) Modi have very good relationships at that level. And it's not just over the Russian oil," Bessent said.
(With inputs from PTI)