India diversifies exports as shipments to US decline: SBI research report

Share of India's merchandise exports to other countries increased as shipments to the US declined since July 2025, indicating diversification of export basket across product categories, according to an SBI research report.

India's total merchandise exports during April-September 2025 inched up by 2.9 per cent to USD 220 billion compared to USD 214 billion in the year-ago period, the report said.

Cumulative exports to the US also registered a growth of 13 per cent to USD 45 billion in the April-September period from USD 40 billion in the year-ago period, though there could be some front-loading effects to the aftermath, with September figures registering negative year-on-year growth of about 12 per cent, said 'Ecowrap', the SBI's research report.

The report further said the share of the US in India's exports has been declining since July 2025, falling to 15 per cent in September, mainly because of a decline in exports of marine products, precious and semi-precious stones, ready-made cotton garments, and cotton fabrics.

"Interestingly, the share of India's merchandise exports to other countries during this period has increased significantly, indicating the diversification of our exports basket with the UAE, China, Vietnam, Japan, and Hong Kong, as also Bangladesh, Sri Lanka, and Nigeria being among the top destinations (over FY25) across different product categories," the report said.

"So, could it be that some destinations are exporting more to the USA after procuring from India?" it said.

According to the report, Australia's share in the US imports of pearls, precious, semi-precious stones has increased to 9 per cent YTD in January-August 2025 from 2 per cent during the same period in the previous year.

Hong Kong, too, registered an increase in share from 1 per cent to 2 per cent to the US during the same period.

The SBI research report further said the buoyancy in trade talks reaffirms India's desire to come out of the highest (among Asian peers) tariff structure while enhancing capability building across several loops, with recently concluded LPG deals and strategic defence deals last month, bolstering the fair probability of a mutually amicable, fruitful negotiation.

Tariff has impacted India's labour-intensive sectors such as textiles, jewellery, and seafood, particularly shrimp, which operates with a lower margin, the report said.

To support the exporters, the government has approved Rs 45,060 crore, including Rs 20,000 crore in credit guarantees on bank loans.

This is aimed to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets, it said.

By enabling collateral-free credit access under CGTMSE, it will be strengthening liquidity, as also ensures smooth business operations since the tariffs have led to a steep drop in container volume of shipments to the US, the report added.