India's exporters tap new markets to offset losses from US tariffs

India's merchandise exports grew 6.7% year-on-year to $36.38 billion in September 2025. However, shipments to the United States declined 11.9% to $5.46 billion during the same period

India’s export diversification strategy, aimed at mitigating the impact of steep 50 per cent tariffs imposed by the US, has begun showing results, according to a report by The Economic Times. At September end, exports of cotton garments increased to the United Arab Emirates (UAE), France, and Japan, even as shipments to the US fell 25 per cent year-on-year.

 

Overall exports rise; shipments to US decline 

India’s merchandise exports rose 6.7 per cent year-on-year to $36.38 billion in September. However, exports to the US – its largest trading partner – fell 11.93 per cent to $5.46 billion during the same month. Although the US accounts for 18–20 per cent of India’s total merchandise exports, certain sub-sectors remain highly dependent on the American market. Around 60 per cent of carpet exports, 50 per cent of made-ups, 30 per cent of gems and jewellery, and 40 per cent of apparel exports are destined for the US.

 

 

Official data for September show that marine product exports to the US declined 26.9 per cent, while those to China, Vietnam, and Thailand surged by over 60 per cent. Similarly, exports of certain gems and jewellery, basmati rice, tea, carpets, and leather goods fell in the US market but registered growth in other destinations.

 

Bilateral talks under way with US 

The US imposed a 25 per cent across-the-board tariff on all Indian-origin goods, which was doubled to 50 per cent from August 25. Both nations are currently negotiating a bilateral trade agreement (BTA) with the goal of boosting bilateral trade to $500 billion by 2030.

 

Also read: Trade deficit hits 13-month high as US exports fall 12%, gold imports surge

 

Rice exports shift from US to other markets 

According to data from the commerce and industry ministry, India’s exports of basmati rice and tea to the US fell in September. Although the US is not among the leading destinations for Indian tea, exports to the country declined 22 per cent year-on-year. However, tea exports to the UAE, Iraq, and Germany increased.

 

Exports of basmati rice to Iran rose six-fold to $41.07 million, offsetting some of the decline in the US market.

 

Ajay Sahai, director general, Federation of Indian Export Organisations (Fieo), stated that export diversification is healthy for the growth of India’s exports.

 

Carpet exports fall in US but gain in other regions 

Exports of handmade carpets to the US dropped 26 per cent, but increased to Canada and Sweden in September. As part of its market diversification drive, the commerce ministry has identified 40 key importing countries across North America, Europe, Asia, Africa, Latin America, and Oceania. Together, these economies account for nearly three-fourths of global textile and apparel demand.

 

Outreach programmes are being developed to expand 5-6 per cent market share in these countries.